5 Important Pennsylvania Estate Planning Documents

Senior couple, documents and sign contract for life insurance or home mortgage. Discussion, signature and retired elderly man and woman signing legal paperwork for will or loan application together.

It’s vital to have a well-drafted estate plan in place to ensure your assets will be distributed in the way you wish after you pass — and your loved ones will be financially protected. However, a comprehensive estate plan is so much more than a last will and testament. Not only can you have documents in place that provide for your family when you pass away, but you can also plan for uncertain events such as incapacity or disability. In Pennsylvania, there are several crucial estate planning documents you should have in place to help ensure your goals are met and your wishes are carried out.

The following are five essential estate planning documents that can help you achieve your objectives:

1. Last Will and Testament

A last will and testament is the foundation of every estate plan. It specifies your intentions regarding how you wish your property to be distributed when you pass away and provides instructions for how financial matters should be handled. In addition to designating beneficiaries who will receive your assets upon your passing, a will can also name an executor to carry out the terms of your will and specify a guardian for any minor children you have. Without a valid will, your property will be distributed in accordance with Pennsylvania’s intestacy laws — which may result in unintended consequences.

Importantly, a will is an estate planning document that only becomes effective at the time of death. It cannot be used to plan for incapacity during your lifetime. A will also does not avoid the probate process in Pennsylvania. This is why it’s vital to have a thorough estate plan in place, based on your specific objectives.

2. Revocable Trusts

A revocable trust is a type of trust that can be altered at any point during your lifetime. For instance, you can modify it to add or remove beneficiaries — and sell trust property. You can also transfer assets into the trust or sell trust property. In most cases, the creator of a revocable trust will name themselves as the trustee to remain in control of the trust while they are alive. A successor trustee would step in if you become incapacitated or when you pass away.

Revocable living trusts can be a crucial planning tool. They provide a significant amount of flexibility and can potentially avoid the probate process if all your assets are transferred into the trust prior to your passing. However, revocable trusts come with a few drawbacks that should be considered, depending on your goals. For instance, they do not eliminate federal estate taxes or state inheritance taxes. They also do not offer the asset protection that other types of trusts can provide.

3. Irrevocable Trusts

There are many types of irrevocable trusts that can be used in estate planning. Unlike a revocable trust, a grantor no longer has control over assets when they are placed in an irrevocable trust — these trusts cannot be changed, revoked, or terminated. Irrevocable trusts are a good planning tool for those who wish to reduce estate tax consequences and protect their assets. Since the property in the trust is no longer within the reach of the grantor, these trusts can also be used to help satisfy the Medicaid income requirements.

Irrevocable trusts can be set up not only to benefit relatives and friends as beneficiaries, but you can also designate a charitable organization in which you would like to receive assets. Other types of irrevocable trusts recognized in Pennsylvania can include marital trusts, pet trusts, irrevocable life insurance trusts, personal residence trusts, and many others.

4. Durable Financial Power of Attorney

One of the most important estate planning documents you should have in place is a durable power of attorney. This document gives authority to someone who will act as an agent on your behalf in the event you become incapacitated and cannot handle your own financial affairs. A power of attorney can give the agent the power to handle your banking matters, pay taxes, operate your business, engage in property transactions, and delegate other financial responsibilities.

5. Advance Health Care Directive

An advance health care directive allows you to set forth your preferences for medical treatment if you become incapacitated and cannot communicate your wishes to doctors. The document designates a person to make healthcare-related decisions on your behalf and specifies the type of medical care you want — and do not want — to receive. An advance health directive can also be used with a living will to specify your decisions concerning end-of-life care such as whether you wish to be resuscitated or intubated, receive pain medication, or receive life-prolonging treatment.

Contact an Experienced Pennsylvania Estate Planning Attorney

By having the proper estate planning documents in place, you can rest assured that your future wishes will be carried out and your loved ones will be financially protected. At Berman & Associates, we offer compassionate counsel and skillful representation for Pennsylvania estate planning matters. Providing our clients with the personalized time and attention they deserve, we are dedicated to assisting them with creating tailored estate plans that meet their needs. Located in Media, Pennsylvania, we serve clients in Delaware and Chester counties, as well as in the City of Philadelphia. We welcome you to contact us to schedule a consultation.

Categories: Estate Planning