Probate

When you pass away, all of your assets are dividable into probate and non-probate property. Probate property passes under the intestacy laws of your state or through your will. Non-probate property passes to a beneficiary through joint tenancy or life insurance.

If you are a resident of Pennsylvania, your estate will be probated in the County of your domicile. The process of opening an estate is relatively simple and requires that a will, if you have one, be submitted to the court to determine its validity. Thereafter, your personal representative is sworn in and letters testamentary or administration are issued. Your personal representative must thereafter account for all of your assets and debts, file an inventory and inheritance tax return with the state, pay your debts, and distribute your property. After this has been completed, your estate can be closed and your personal representative can be released by the court from potential liability.

Wills

A last will and testament is a legal document that allows you, the testator, the ability to direct to where and to whom your property, real and personal, will be distributed after your death. A last will also allows you to appoint a personal representative—generally known as an executor or executrix—to act as your legal representative to carry out your wishes. Having a properly executed will is an important document to have because it gives you the power to designate your wishes and control distribution of your property after your death.

If you die without a will, intestacy is a default statutory scheme which directs the distribution of your property. Intestacy statutes vary from state to state, but generally favor those individuals who you would favor in a will—your spouse and children. In Pennsylvania, for example, the general scheme is down to spouse and children, up to parents, down to siblings, up to aunts and uncles, down to nieces and nephews, followed by escheat to the Commonwealth.

Financial & Medical Power of Attorney

A financial power of attorney allows you to appoint an individual—a trusted agent or proxy—to have broad powers to handle your financial matters. Your agent has no duty to exercise such powers, but when they do, your agent must exercise due care to act for your benefit. The person you select as your agent may exercise the powers granted to them throughout your lifetime and even after you become incapacitated unless you limit the duration of the power of attorney or a court terminates the authority. A financial power of attorney is an important document to have so that your financial matters can be adequately and responsibly handled in the event of some disability.

A medical power of attorney is very similar to a financial power of attorney. A medical power of attorney allows you to appoint a proxy to serve as your attorney-in-fact who, in the event of your incapacity or disability, can make health care decisions on your behalf. For example, a medical power of attorney may authorize your admission or discharge into or from a medical, nursing, residential, or similar facility, or to enter into agreements relating to your care. In addition, a medical power of attorney also permits your agent to take any legal action necessary to do what you have directed, for example, through a living will.

Living Will

A living will, also known as an advance health care directive, is a written document that outlines various types of medical care you would like to receive or refuse if you become unable to make that choice on your own. Examples include whether or not you want the aid of mechanical breathing through respiration or ventilation, tube feeding, or resuscitation. In the event you cannot make health care decisions, your family and doctor can consult your living will. If you have a medical power of attorney, this person can be guided by your living will. Additionally, a medical power of attorney and living will can overlap, however, a medical power of attorney is often more expansive. A living will cannot cover every possible situation.

Trusts

Quite simply, a trust is a fiduciary relationship in which one or more trustees are called upon to manage, protect, and invest certain property and the income generated therefrom for the benefit of one or more named beneficiaries.

When planning for your future and your estate, a trust can be a very beneficial and valuable tool depending on individual circumstances. It is common to hear that a trust can help you avoid probate fees and taxes, however, creating a trust can be costly. Probate fees in Pennsylvania, while costly, are not burdensome. Additionally, state inheritance taxes could be 4.5% or as low as zero percent depending on to whom you choose to leave your property. It is also important to bear in mind that state inheritance taxes are not avoided by a revocable trust.

Given the above, in order to derive the full benefit of a trust, Giuffre Law Office can help you determine whether or not it would be a useful to you.