Estate Planning FAQ

Estate Planning
By: Owlett & Lewis, P.C.

What exactly does a Last Will and Testament do and why should I have one?

A Last Will and Testament, commonly referred to as a Will, is the legal expression of a persons desires concerning the distribution of his or her property upon his or her death. This is a written document that is executed in accordance with certain legal formalities.

In Pennsylvania, if you die without a Will, your estate will be distributed pursuant to an established order of distribution set by Pennsylvania law. By creating a Will, you provide for the distribution of your estate, you name the person who is to administer your estate and if you have minor children, you name who will be their Guardian. In other words, you select who will receive your property and who will be responsible for carrying out your desires as outlined in your Will. If you do not have a Will, the probate judge will decide who will administer your estate and who will be the Guardian of your minor children.

If you presume your spouse will receive everything if you do not have a Will, you may be mistaken. While your spouse will receive the jointly owned property, under Pennsylvania law your spouse is only entitled to a portion of your estate. The remainder would be distributed to your children. If those children are under eighteen (18) years of age, their inheritance will be held in trust until each child attains age eighteen (18). If you do not have a spouse and you do not have any children, your estate would be distributed amongst your living mother, father, brothers, sisters, aunts, uncles, grandparents and cousins.

What is a Power of Attorney and what does it do for me?

A Power of Attorney is an instrument whereby during your lifetime you appoint another person or persons or financial entity as your Agent and empowers that Agent to perform certain acts on your behalf. Usually the person(s) you select as your Agent is a spouse, child or another trust-worthy relative or a bank. You can limit the acts which you authorize your Agent to perform. For example, you can authorize your Agent to:

• Authorize medical or surgical care for you;
• Authorize your admittance into a skilled nursing facility;
• Deposit and write checks on your behalf.

You can also give a broad range of powers to your Agent. For example, you can authorize your Agent to:

• Sell real estate;
• Make limited gifts on your behalf;
• Pursue tax matters.

What is a Living Will?

A Living Will is a written instrument expressing your intent and desire to refuse extraordinary medical treatment - such as artificial life support systems and artificial nutrition or hydration - that is designed to prolong your life. The statement is written when a person is competent. It is used only when a person is incompetent or unconscious. It also may express your desire to be given medication to alleviate pain. A Living Will is addressed to your family, physician, and all others having responsibility for your care. You can appoint a specific person, but need not, to make the decision to terminate extraordinary life support. If you are competent and conscious, you can always terminate your extraordinary life support.

What is the difference between a Living Will and a Health Care Proxy?

The difference between a Living Will and a Health Care Proxy is that generally a Living Will pertains to your desire to deny treatment if there is no reasonable expectation of recovery. Whereas a Health Care Proxy is a designation of a person to make medical care decisions whether minor or major when you cannot make decisions for yourself. For example, if you are unconscious and have a broken leg, your Health Care Proxy can authorize surgery to repair your broken leg. In some instances, a Health Care Proxy is encompassed in a Power of Attorney.

What is a Revocable Living Trust and how do I know if it is beneficial to have one?

This question is best answered by your Attorney, after having reviewed your personal financial information. However, in general a Revocable Living Trust Agreement is an agreement whereby property is given to a trustee, which can be an individual or a qualified financial institution, to manage for the benefit of a third person(s). For example the beneficiary of a revocable living trust may receive the interest and dividend income from the trust assets for a set number of years or until he/she attains a certain specified age. This is only one example.

There are various types of Trust Agreements. They range from Revocable (which gives the Settlor the right to amend the trust at any time) to Irrevocable (this type of trust cannot be amended), to charitable, spendthrift and bypass, to name a few.