Estate Planning

A: A will is perhaps the most important legal document the average person will ever sign. It is an instrument that, upon your death may, control who gets your property, who will be the guardian of your children, and who will manage your estate.

A: If you die without a Will you are “Intestate.” In that case, your assets pass in accordance with rules set up by the Commonwealth of Pennsylvania. A rule to divide the assets of intestate estates, but often these rules do not give assets to the people that the deceased person would have had they put his or her wishes in a Will.

Most people assume that if they die without a Will all their assets pass automatically to their surviving spouse.

However, a surviving spouse receives everything only if the intestate deceased had no surviving issue (children, grandchildren, etc.) or parents. Our Estate settlement attorneys can provide further guidance regarding these rules.

If there is a surviving spouse, no surviving issue, but the deceased’s mother or father survives the intestate decedent, the surviving spouse gets the first $30,000.00 plus one-half the balance while the surviving parents divide the remaining one-half share.

A: In Pennsylvania, you must be at least 18 years of age and of sound mind to make a will. Your will must be written and signed at the end. If you are unable to sign your will, someone else may sign the will for you as long as this is done your presence and at your direction.

In Pennsylvania it is not necessary for the signing of your will to be witnessed by anyone: However, we recommend that at least two people witness the signing of your will.

A: A codicil is an amendment or addition to a previous will. A codicil may be as simple as changing or adding a name or a number, or it can be as complex as rewriting or adding whole new sections to your existing will. A codicil to your will becomes part of your will and will be read together with your will to determine how your assets will be distributed upon your death.

A: Probate is the process of filing a Last Will and Testament with the Court and having the state recognize the executor of your estate. If you die without a will, the state recognizes an administrator to handle your estate.

A: In Pennsylvania, if you marry after you execute your Will, your new spouse will be generally entitled to whatever they would have been entitled to if you were to have died without a Will

If you divorce after you have executed your Will, all portions of your Will that make mention of or give anything to your ex-spouse are revoked automatically.

If you have or adopt a child after you execute your Will, that new child will take the portion of your estate, after your surviving spouse, that they would have been entitled to if you had died without a Will.

A: Pennsylvania does not require that you file your Will with anyone after you have signed it. The Buzgon Davis Law Office offers complementary vault storage for all clients’ Wills.

A: Yes, in some circumstances. In Pennsylvania, there is no requirement that you have to leave anything to your children. You may disinherit any or all of your children, as you desire.

However, unless you have a valid post or prenuptial agreement, your spouse will have a right to a portion of your estate even if you have intentionally excluded them from your Will. In Pennsylvania, your spouse will be entitled to “elect” against your estate and collect an elective share of 1/3 of your total estate regardless of whether or not you have a valid existing Will.

A: After you sign your will, you should keep it in a safe place that is easily accessible. As a courtesy to our clients, Buzgon Davis offers to retain original Last Wills and Testaments in our vault at no charge. Our clients will often store their original documents in our fireproof files where they cannot be easily destroyed or stolen. Be sure that the person you have appointed as your personal representative knows where you have placed your will.

A: Yes. However, your family may not contact your Estate Planning Lawyer or look at your Will until after your funeral. Therefore, we suggest that plans are in your Will and are known to key people who will be contacted at your death.

A: Will reviews are situational, but as a general rule, you should review Will terms annually or upon the occurrence of any life changing event.

A: There are two types of gifts: “specific” gifts and “general” gifts.

Specific gifts leave a particular object to a certain individual. A general gift leaves a certain percentage of all that remains after the specific gifts are made.

The residual heir or heirs usually receive the bulk of the estate after the smaller gifts and valuables are distributed. Usually, the residual heirs are the Will maker’s spouse or closest relatives. Each Will must have at least one residual heir.

A: If you have minor children, naming a guardian for them is one of the most important considerations in your will. Typically, if one parent dies, the surviving parent will remain responsible for the children. However, complications arise if both parents die simultaneously, or if one parent has re-married. Unless you name guardians for your minor children in your will, the Court will decide who takes custody of your children in those situations.

A: Upon death, a person’s property is first used to pay for probate and funeral expenses, then to pay debts. Generally, all debts must first be paid before assets can be distributed.

A: Simply put, a Trust is an arrangement where one person, the Grantor, gives some property (cash, real estate, etc.) to another person (Trustee) to be held for third person (Beneficiary). A Trust can be very simple or very complex. The Buzgon Davis attorney can provide further information regarding these important estate planning tools.

A: When you sign a new Will, your previous Will is automatically revoked.

To revoke a will without making a new one, all you have to do is intentionally tear it up, deface it, burn it or destroy it. If this is done accidentally, then the will is not revoked.

A: Estates are subject to two kinds of taxes: Federal Estate Tax and State Death Tax.

Though the rules are currently in flux, the Federal Estate Tax has a minimum of 18% and a maximum of 55%. There is, however, an exemption from this tax if the value of your estate is below a certain threshold. The exemption amount varies depending on what year you die. In 2012, for example, an estate worth less than $1,000,000.00 would not be subject to estate tax.

A: Yes. The U.S. Constitution requires the legal documents of one state to be recognized by the others, if a will was validly made while you were living in another state, it is probably valid in your new state. However, if your will was not “self-proved,” it may not be accepted by certain courts until the witnesses sign an oath swearing that they saw you sign your will. Because of the expenses involved in finding your witnesses, it is probably best to rewrite your will after moving to another state.

A: Assuming that you have identified a specific beneficiary under the life insurance policy, your Will would have no role in your life insurance policy. However, the selection of beneficiaries should be made as part of an overall estate planning structure.

A: A Durable Power of Attorney allows you to name someone to manage your financial and legal affairs. Effectively, granting your Power of Attorney allows someone else to Act on your behalf. As such, this is a very powerful document that can be misused. Therefore, careful consideration must be given to whether a Power of Attorney is appropriate. However, many financial institutions won’t honor one unless it’s on their form. And, if accepted, it may work too well — giving someone a “blank check” to do whatever he/she wants with your assets. It can be very effective when used with a living trust, but risky when used alone.

A: A Living Trust is a legal document that contains your instructions for what you want to happen to your assets when you die. But, unlike a will, a Living Trust avoids probate at death, can control all of your assets, and prevents the Court from controlling your assets at incapacity.

A: A Living Will is for medical affairs; it lets others know how you feel about life support in terminal situations. A Living Will is also important and can take away the uncertainty of a difficult decision by family members in case of a medical emergency. Learn more about Living Will’s here.

A: It is a document signed by a competent adult designating a person that you trust to make health care decisions on your behalf should you be unable to make such decisions. The individual chosen to act on your behalf is referred to as an “agent.”

A: It is effective immediately after it is executed and delivered to the agent. It is effective indefinitely unless it contains a specific termination date, it is revoked, or you become competent.

A: An agent may make health care decisions on your behalf only if you are unable to communicate your own health care decisions in any manner.

A: Estate taxes are different from, and in addition to, probate expenses and final income taxes (which must be paid on income you receive in the year you die). Pennsylvania’s death/inheritance tax is based upon the relationship of the beneficiary.

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