Estate planning involves planning for the management and distribution of your assets after your death or incapacitation. However, it’s not just about managing your assets – it’s about preserving your legacy. This detailed process provides a sense of security and peace of mind, knowing that your wishes are honored and your loved ones are cared for. Key components of an estate plan include:
- Will: Outlines the distribution of assets and guardianship of minor children
- Trust: Manages and protects assets for beneficiaries
- Durable power of attorney: Designates someone to handle financial affairs if the principal becomes incapacitated
- Advanced healthcare directive: Specifies medical care preferences and appoints a healthcare proxy
- Business succession plan: Ensures smooth transition and continuity of business operations
In this post, seasoned PA estate lawyer Jeremy Mittman (JM) offers advice on these important aspects of estate planning in the following in-depth conversation.
What is the purpose of a will?
JM: A will is like a personalized instruction manual for your assets. As the testator, you specify how your assets should be distributed upon death. You can even name a person you trust as the executor to manage the distribution of assets, place conditions on asset use, and appoint guardians for any minor children. The executor’s job is to collect assets, manage them, pay debts and taxes, and distribute the remaining assets as directed in your will. Without a will, the state of Pennsylvania distributes your assets according to the rules of the Intestate Statute, which can be time-consuming and costly and, in most cases, will not distribute your assets as you would have wanted. Unfortunately, 40-45% of people in Pennsylvania die without a will, leaving their estate subject to these default rules.
How do trusts work?
JM: Think of a trust as a safety deposit box for your assets. As the trustor, you place your assets in the care of a trustee, who manages them for your beneficiaries. This arrangement can help avoid probate, a lengthy and costly legal process, saving time and money and ensuring privacy. There are different types of trusts, including revocable and irrevocable, each with unique benefits and purposes. An estate attorney can help you understand whether a trust is appropriate for your situation and empower you to make the best decision for your estate planning.
Why should you designate a durable power of attorney?
JM: A durable power of attorney (DPOA) allows you, the principal, to designate a trusted person (agent or attorney-in-fact) to act on your behalf, granting broad powers such as entering into contracts, paying bills, and making medical decisions. The DPOA remains valid even if you become incapacitated, distinguishing it from a general power of attorney and making it particularly useful in cases of dementia or Alzheimer’s. This also prevents the Orphan’s Court’s costly and time-consuming process of appointing a guardian for minors, who may not always be a loved one or close relative.
You can also incorporate long-term care planning into your estate plan, which prepares for potential long-term medical and personal care needs. This ensures that financial resources are available and care preferences are clearly defined. Together, these documents help ensure that your healthcare preferences are respected and that decisions are made according to your wishes, even when you cannot communicate them yourself.
How can I ensure a smooth transition for my business when I retire or if I can no longer manage it?
JM: Business continuation planning ensures a smooth transition for a business owner retiring or unexpectedly leaving due to incapacity or death. This involves six key steps: establishing long-term financial goals, determining the current business value, creating additional business value if necessary, deciding on the sale of the business to either an external or internal party, establishing a contingency plan for unexpected events, and preparing for the eventual transition. These steps ensure your business can continue successfully and align with your financial and estate planning goals.
How should I plan my estate to account for step-relatives?
JM: With step-relatives becoming increasingly common, it is crucial to consider them in estate planning. Clearly defining the roles and beneficiaries in your estate plan can prevent unintended distributions and legal disputes. Use precise language to specify which family members are included or excluded as beneficiaries. This includes distinguishing between biological children, stepchildren, and other relatives. Consulting with an estate planning attorney can help ensure your intentions are accurately documented and legally binding, minimizing potential conflicts and ensuring your estate is managed according to your wishes.
Estate Planning – Protect Your Future and Your Family
Estate planning is about more than signing stacks of legal documents. A thorough estate plan can protect you and your family, ensuring your intentions are respected, and your dependents are provided for. Seasoned estate lawyer Jeremy Z. Mittman will ensure you receive the protection and dedicated advocacy you deserve. Specializing in all aspects of elder law and estate planning in Montgomery, Philadelphia, and Bucks Counties, PA, we pay close attention to each client’s unique needs, guiding them on the best course of action to plan for their futures and create a meaningful and lasting legacy. When seeking the best estate planning attorney for you, let us provide the dedicated and professional assistance we’re known for. Contact us today to learn more and get started.