Estate Law – FAQs

A: Yes. A WILL can always be changed throughout your life. A will is not filed with a court until after a person dies.

A: To the commonly asked question, “Do I need a will?” we recommend that every adult have a will to set forth his or her intentions and wishes upon their death.

If you die without a will, the Pennsylvania state law will dictate how your estate will be distributed, which may not be what your wishes are.

You should name the person who you want to handle your affairs after your death. This person is called the Executor.

In addition, if you have children and they are minors, your will should name a guardian, otherwise the court will dictate who will have custody of your minor children.

Preparing your will is just plain good stewardship and planning of your assets and your affairs!

A: The cost of your will depends on how complex your estate matters are. A lawyer could give you the estimate of the cost after consulting with you to determine your needs.

We provide simple wills for senior citizens (age 65 years and older) at no cost as a public service.

A:

Will

A Will is a legal document stating who you want to receive your property upon your death, who you want to settle your estate upon your death, who you want to have custody of any minor child or children that you have at the time of your death, and who you want to take care of any property that is left to your minor children.

Power of Attorney

Financial Power of Attorney:

A Financial Power of Attorney is a written, legal document that authorizes another person to act on your behalf. The financial power of attorney may be narrowly defined, in which case it would be called a limited power of attorney. A power of attorney can be written so that it only takes effect if you become mentally incapacitated. It allows another person to make bank transactions, sign Social Security checks and other income checks, apply for disability, write checks to pay bills, sell property, liquidate assets, etc.

Durable Power of Attorney:

A Durable Power of Attorney is a written, legal document that authorizes another person to act on your behalf. The durable power of attorney is effective as soon as it is signed and will stay in effect even if you become mentally incapacitated. A durable power of attorney allows another person to make bank transactions, sign Social Security checks and other income checks, apply for disability, write checks to pay bills, sell property, liquidate assets, etc.

Health Care Power of Attorney

A Health Care Power of Attorney is a written, legal document that authorizes another person to make medical decisions on your behalf in the case you are not able to do so due to an incapacitating medical or mental health condition, it is different from a living will (advance directive), as the living will directs what medical services you would want if you are in the end stages of life, whereas the medical power of attorney will appoint a person to make decisions for you during those times in your life that you are not in the end stages of life, but times that you are not able to make medical decisions yourself due to your health condition.

Living Will (Advance Directive)

A Living Will is a written, legal document, typically signed in advance while in good health, that specifies the decisions a person wish to be made about his or her medical treatment in his or her end stages of life, in the event he or she is unable to make or communicate them at that time.

Trust

A legal entity to which you transfer your assets for management by a Trustee. It can be either revocable or irrevocable if made during the lifetime, and is often referred to as a Living Trust. A Testamentary Trust is a trust that is established under a person’s will and becomes effective at that person’s death.

A: While you do not have to bring any documents, it is helpful if you know the following information:

1. Names, addresses, phone number(s), email address(es) of:
   • beneficiary(ies),
   • guardian(s),
   • trustee(s),
   • executor(s),
   • power(s) of attorney (financial and medical).
2. Assets you own
3. How the assets are titled (i.e. joint names, sole name, in trust for, beneficiary designation),
4. Approximate value of assets:
   • Assets include real estate, vehicles, life insurance, annuities, 401(k), IRA’s, and businesses in which you have an interest, etc.
5. Debts that you still owe

A: Pennsylvania state law provides for a probate process in order to efficiently administer a decedent’s assets and debts, protect beneficiaries and creditors, and to make sure that the estate is distributed properly.

Probate may not be necessary if there are no assets in the decedent’s name alone, such as when there is a Living Trust which holds title to all of the decedent’s assets and sets forth the distribution of those assets. Other examples of assets that may not have to pass through the probate process are bank accounts that are held jointly with the decedent and another person(s), are held in the decedent’s name “in trust for” or “payable on death” to a beneficiary, or real estate that is titled in the name of decedent with another person jointly “with right of survivorship.”

A: Some of the things that you will want to think about are:

• heart-lung resuscitation (CPR)
• mechanical ventilator (breathing machine)
• dialysis (kidney machine)
• surgery
• chemotherapy
• radiation treatment
• antibiotics
• tube feedings to be given for food
• tube feedings to be given for water
• do you want to be an organ donor

You will always receive medical and nursing care to help make you more comfortable and pain medication to alleviate pain and suffering, unless you directed that you did not want any.

Remember, as long as you are able and competent to make your own medical decisions, you will be the one making them. Your agent will only be making medical decisions for you if you are physically or mentally unable to make your own decisions, and then they would be making those decisions in accordance with the guidance you give them in your living will or medical power of attorney.

A: We do not recommend planning for your future this way.

Estate planning documents will be valid only if they are in conformity with Pennsylvania law. Forms and kits do not ensure that this will be the case.

Estate planning involves a great deal of judgment, planning and skills acquired by professional training and experience. When non-lawyers act as their own lawyers, it often ends up costing their beneficiaries and family more money in legal costs when your intentions do not work the way they were intended.

As the cost of drafting estate planning documents should not be exceptionally high, it is well worth the investment to have it done correctly.

A: Guardian: Who will take custody upon my death? Who will be making decisions about their assets?

Trustee: Often we establish trusts for the minor children in the will and a Trustee will be named to handle to finances while the child(ren) are minors or until an age specified in the trust.

A: A Living Trust is an entity that you transfer your assets to while you are alive, and the Trustee that you name in the trust document will manage your trust. Upon your death, the Trustee will distribute your trust assets in accordance with the provisions you set forth in your trust document.

You should talk to your lawyer about whether a Living Trust would be beneficial for you and discuss the costs of doing one, as this will depend on the complexity of your estate.

Many times a Living Trust is marketed to senior citizens by high-pressured sales pitches that cause people to fear that their assets will all go to the state, or will be “eaten up” by high death taxes and attorney fees. It is prudent to talk to your lawyer about whether a Living Trust makes sense for you and talk about your concerns regarding death taxes, attorney fees, etc., before you fall prey to a marketing scheme that may not truly meet your needs.

A: Yes, often there is some property that is left out of the Living Trust, either purposefully or inadvertently, which will need to pass through the probate process: Your Will then directs what should happen to that property.

A: Generally speaking, in Pennsylvania there will be inheritance tax whenever there are assets transferred upon a person’s death, and assets in a Living Trust will typically be subject to death taxes. Certain types of trusts may have tax advantages: You should discuss this with your lawyer to determine if these types of trusts make sense for your situation.

Although there may not be a need for the probate process when a Living Trust is in place, there is still the need to accumulate assets, pay debts, and administer the Trust estate. There are certain notices required by the law. It is usually necessary to hire a lawyer to help in the administration of the trust estate after death.

A: The probate or estate administration process must occur when someone dies owning property in his or her name alone, requiring the appointment of a personal representative by the court, who will handle the administration of the decedent’s assets and debts, and settle his or her affairs.

If the decedent has a will and appoints a personal representative in the will, that person will be called an Executor.  If there is no appointment in the will, or if the decedent dies without a will, that person will be called the Administrator.

Once the Executor or Administrator is appointed by the court, then a Certificate evidencing the authority of the Executor or Administrator is issued (sometimes called “Short Certificates”) will be issued.  These are certificates of authority issued by the court evidencing that the Executor or Administrator is authorized to act on behalf of the Estate of the decedent, which will allow for liquidating estate assets, opening an estate checking account, selling estate real property, etc.

The probate process in Pennsylvania is not usually very long compared to many other states. The personal representatives have broad authority to efficiently and quickly administer the estate, including liquidation of assets, paying of creditor claims, etc.

While every probate estate is unique, the probate process typically involves the following steps:

• Filing a petition to open the estate and appoint the Executor or Administrator
• Notice to certain heirs as identified in the Pennsylvania statute and the will
• Newspaper advertisements of the estate
• Claim Request Inquiry to Department of Human Services for any claims for Medical assistance recovery
• Inventory and appraisal of estate assets by the Executor/Administrator
• Identification of all debts and expenses, including decedent’s income tax
• Liquidation of/sale of estate assets and payment of debts to rightful creditors
• Payment of death taxes, if any
• Final distribution to the heirs, either by filing a Petition for Distribution with the court for a court order directing the final distribution, or by an informal agreement for the distribution signed by all of the heirs

A: The cost of probate typically involves filing fees with the court, advertising the estate, and filing certain legal documents required by the probate process.

Attorney fees will be incurred for guiding you through the probate process and filing the necessary documents, which may include preparation of an inventory and inheritance tax returns, federal estate tax returns, or fiduciary returns. Attorney fees will vary based on the complexity of the estate.

Be a good consumer of legal services and talk with your attorney about how the attorney fees will be charged, ie, flat fee, percentage fee, or hourly fee, to determine the cost of probate and what will be the best decision for your case.

A: There are certain types of estate legal planning regarding your assets that could potentially avoid probate, although that does not mean that it will avoid death taxes (such as inheritance tax, federal estate tax). For example, the following assets will most likely not pass through probate:

• Property owned as joint tenants with right of survivorship, which passes automatically by law to the joint owner(s) on the death of the decedent (ex: joint bank accounts, real estate titled as joint with right of survivorship, stock in joint names with right of survivorship, etc.)
• Certain retirement assets such as IRAs and 401(k) accounts and annuities which have a designated beneficiary as someone other than the estate of the decedent
• Life insurance policies having a beneficiary other than the estate
• Property that has been transferred to a Living Trust during the lifetime of the decedent
• Certain accounts that are titled “In Trust For” or “Payable on Death” to designated beneficiaries other than the estate

Your attorney will review this planning with you, as there are often pros and cons to this type of planning to avoid probate and you need to be aware of these before you engage in this type of planning.

A: Pennsylvania Inheritance Tax must be filed regardless of the size of the gross estate, even if debts and expenses exceed the value of the gross estate. The debts of the decedent and certain funeral expenses and administration expenses of the estate will be deductions from the gross estate and reduce the amount of inheritance tax due. The Pennsylvania Inheritance Tax Return is due 9 months after date of death. If a payment on account is made within 90 days after date of death, there will be a 5% discount on the tax amount.

Many estates will not be subject to the Federal Estate Tax, depending on the size of the gross estate and the federal estate tax law in effect. Your attorney will guide you in determining which assets are subject to the federal estate tax and in preparing and filing the return.

Property passing to a surviving spouse and also life insurance proceeds have a zero (0%) tax rate. If either a payment on account, or the inheritance tax return itself with payment, is filed within 90 days after death, a five (5%) percent discount will apply to the tax due. Currently, the tax rates are as follows:

• Surviving Spouse — 0%
• Children under 21 years of age – 0%
• Grandparents, parents, children over 21 years of age, grandchildren, and certain other lineal descendants of the decedent — 4.5%
• Decedent’s siblings — 12%
• Others (Nieces/Nephews, Friends) — 15%