Delaware County's Law Firm for Estate Planning and Administration
The Objectives of a Complete Estate Plan
Why do you need a Will? Perhaps more to the point why do you need estate planning? Estate planning is not only for the very rich – It is for anyone who has a family and anyone who concerned about how their property – no matter what its value - will be distributed when they die
In order to fully understand why you may need an estate plan, you must first understand what estate planning really is.
A concise definition of estate planning is the process of addressing the following concerns:
1. Taking care of your family
2. Ensuring the proper disposition of your assets;
3. Reducing the cost of dying; and
4. Addressing “living probate”.
Taking Care of Your Family
One objective of estate planning is to ensure that your family is adequately provided for in the event of the death of one or both spouses. The loss of one or more working parents will without adequate planning create a financial crisis for most families - even the death of a non-working parent can place significant additional financial burdens on the family. This is a concern best answered and addressed by your financial planner and is normally beyond the scope of the attorney’s normal area of expertise.
That being said there is one thing that you should address with your estate planning lawyer particularly if you have minor children, and that is making sure your property passes to them in the proper way. Just as important as who is to inherit your property is the question of the way in which they are to inherit that property. Some people are not equipped to receive money or property outright because they are minors or because they have special needs by reason of physical or mental disability or simply because of their inability to handle money. For those individuals receiving property in trust rather than outright may be appropriate.
Choosing a Guardian of the person to care for your minor children (those under 18 years of age) is one of the most important estate planning decisions you will make. If both you and your spouse should die, your children will have to be placed with a new family. This is an extremely disruptive process for the children, even if the new family are grandparents or other relatives. If your Will does not appoint a Guardian for your children, the Court will appoint choose the Guardian for you – probably your closet living relative and maybe the last person you would choose. The Guardian once appointed serves as their parent in your place until your children reach the age 18. This situation can be avoided if you appoint the Guardian that you want in your Will of guardianship. Here are some things you should consider in choosing the guardian for your children:
The Proper Disposition of Your Assets
Fundamentally, an estate plan should fulfill your wishes as to how you want to dispose of your property at death. Your estate plan should address not only how property is distributed under your Will, but also the disposition of property not controlled by the Will, such as life insurance, IRAs, qualified retirement plans, and annuities. A complete estate plan will address the complete disposition of all of your property.
The Costs of Dying
An estate plan should also be designed to reduce the cost of dying such as death taxes (i.e., the federal estate tax and the Pennsylvania Inheritance Tax) and probate costs, to the lowest possible level.
And finally, the estate plan should deal with the question of what happens if you are unable to handle your affairs during your lifetime because of a mental or physical disability. This is sometimes referred to as "Living Probate".