Areas of Practice
Wills, Trusts and Estates
Basic Legal Documents for Personal Legal Planning
Personal legal planning involves identifying possible life difficulties, and planning how you would like to deal with those difficulties. Your decisions are reflected in written documents.
Health and Medical Issues
So long as you are able to express your wishes concerning your health and medical care, that expression will control. Sometimes, however, you are not able to do so. Two documents allow you to express your wishes now and have those wishes be operative even when you are not able to state them yourself.
1. Medical Power-of-Attorney
A medical power-of-attorney is written authorization for someone to act on your behalf with respect to medical issues. You pick someone in whom you have confidence. If you do not have a medical power-of-attorney and the circumstances arise where you are unable to make or express your wishes, the Court will appoint a guardian for you. This is a very expensive and time consuming solution to the problem.
2. Living Will
(Advanced Medical Directive)
Pennsylvania allows a person to designate the treatment he or she would like if their health deteriorates to a point where the person would remain in a coma or in a terminal condition even if every treatment available were used. Generally, the election is to suspend treatments that only prolong the condition without providing any improvement.
Today, if you go to a hospital, the admitting personnel are required to ask if you have a living will and encourage you to get one if you do not already have one. For this reason alone (getting through the admission process in a timely fashion) you might well want a living will. You need a living will if you do not want to be kept alive on life support systems for long periods. Note that this is not an election to die - this is an election to allow God's intentions to be carried out, whatever those intentions may be.
General Business Matters
From time to time people need assistance with general business matters, anything from paying bills to selling real estate. Like issues of heath, you may either select someone you trust in advance, or allow the Court to do that by a guardianship proceeding. The document used to express your preference is a general power-of-attorney.
Power of Attorney
A power of attorney is a written authorization for someone to act on your behalf. The power may be broad and general in nature (a general power of attorney) or limited to specific tasks, such as selling a car or buying a house or making health care decisions (a limited power of attorney). With a general power, your agent may make, on your behalf, any decision you could make for yourself. With a limited power, the agent may make any decision you could make within the limited scope of authority granted.
You need a power of attorney because only a person who is competent may conduct personal business. If you (or your spouse) are in an accident, or for reasons of declining health, are no longer able to make decisions, someone must be designated to do that for you. In a legal proceeding this is called "appointing a guardian,” and involves a court hearing, with delays and expense as common features. The alternate to that is a general power of attorney in which you select the person or persons you want to act for you.
Today, in Pennsylvania (for all practical purposes), a power of attorney may be used by the named agent ONLY after he/she reads and signs a statement attached to the power, agreeing to act in the maker's best interests. For this reason it is not uncommon for a person to sign a general power of attorney and keep it in a file, undistributed, should the need arise for it.
All general powers of attorney are now "durable"; that is, if made while the maker is competent they remain in effect if incompetency later occurs.
Transfer of Property on Demise
Wills, and the transfer of property on one’s demise, have always been part of the legal planning process.
First, here is something important to know. In Pennsylvania, property passes to someone based upon the type of property it is. There are three basic types of property:
1. Contract benefits (life insurance, retirement accounts, some brokerage accounts) pass based on the terms of the contract. They all say, one way or another, "if I die, pay ..." Here you need to review the contract to see if the beneficiary named is the person you want to receive the property.
2. Jointly-held assets, where held as tenants by the entireties (titled to a husband and wife) or as joint tenants with right of survivorship (JTWROS - most bank and brokerage accounts are held this way) pass automatically to the survivor on death. Is this where you want the property to go?
3. Assets held in your name alone (including everything held jointly with a spouse if your spouse dies first) pass according to the terms of your will, if you have a will, and under the intestate act if you do not.
Now, the documents:
1. Will. A will is the written expression of how you would like those items of property owned by you alone to pass upon your death. Often, but not always, a will includes the appointment of someone (or some organization) you trust to "see to your affairs.” This person is the Executor or Personal Representative. Wills often, but not always, contain additional provisions, such as the designation of someone to raise and care for any minor children you may have.
In it's simplest sense, a will is a written document, dated, and signed at the end, showing the intent of the maker that it pass property on the maker's death. In Pennsylvania, a will does not require witnesses. When offered for probate (after the maker's death), however, witnesses must be produced to establish that the signature is indeed the maker's. Pennsylvania provides a self-proving statute providing that a will signed in the presence of two witnesses, with the affidavits of those witnesses and the maker being notarized and attached, can be probated without having to then produce any witnesses at that time.
A will acts as a safety net. It catches assets not otherwise disposed of. You need a will so that the specific plans that are important to your family can be properly provided. Every state provides a plan that is used if you have no will. These are called "intestate acts," with intestate meaning "to die without a will." These statutory wills do what the legislature assumes you would want to do if you had made a will; they just don't do it very well. No provisions are made for the varied capabilities of children, for charitable intentions, for gifts to people who are not your blood relatives (such as your spouse's family, if your spouse dies first, or your family, who are not blood relatives of your spouse, if you die first).
2. Trust: The trust is the most flexible device in the personal legal planning arsenal. In it's simplest sense, a trust is one person holding assets of another under a set of instructions. In a typical situation, the trust arrangement involves three parties: the person who sets up the trust (the "Settlor"), the person who holds and manages the assets (the "Trustee"), and the person for whose benefit the asset are held (the "Beneficiary"). While there are in essence three parties, or roles, one person can hold all three positions.
Trusts come in a wide range and variety of characteristics. Trusts in wills are called "testamentary"; trusts set up by separate instrument are called "living" or "inter vivos." Trusts may be revocable (capable of being changed) or irrevocable (unchangeable once set up). Trusts may be used to manage monies or save taxes or provide for a disabled person. A typical use is to provide for the management of monies for a minor child, where you want to provide for the child’s needs but do not want the child to receive a large sum of money at age eighteen. Trusts also enable management of monies during your lifetime, and allow for certain types of estate tax planning.
You need a trust if you have minor children, or if your assets are such that federal estate tax may apply, or if you want management during your own lifetime, or if you have a disabled child, or if... Actually, as you can see, trusts do many things, depending on your needs and the terms selected. You need to consider a trust any time it might be helpful to you in reaching your planning goals.
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