Estate planning involves the preparation of documents which incorporate complex concepts into easily understood and unambiguous language. Estate documents are prepared for the benefit of the survivors of a decedent. It is therefore crucial that the survivors can easily understand, without confusion or dispute, exactly what the decedent intended and directed. Simultaneously, it is crucial to minimize taxes, expenses, and disputes and the cost and delay of Estate Administration and also minimize the potential that survivors may become hostile towards each other in claiming their interest in their loved one's estate. More than one family has come to blows over this. Anyone who intended to benefit family members and bring them closer together would be poorly served if his or her generosity instead had the opposite effect.
Most adults would benefit from the preparation of a few simple estate planning documents, particularly parents of minor children. Those with significant assets and/or businesses requiring active management would benefit from the creation of somewhat more complex documents.
A document which designates the distribution of your assets upon your death. The Will designates the recipient of dollars, real estate, items of sentimental value and everything else that you own. The Will identifies your representative (Executor/Executrix), designates a guardian for any minor children who may be orphaned and may create various types of trusts.
A Living Will takes effect if and when you are in a coma and can not participate in decisions about your healthcare. A Living Will normally provides specific guidance to your physicians concerning the procedures and medical machinery and drugs which you do or do not wish to receive while in a coma. The Living Will also designates your surrogate, a representative to make the decisions that you would make if you were conscious. In the absence of a Living Will, doctors may be obligated to keep a person alive indefinitely even though they have no chance of regaining consciousness. There are potentially disastrous effects on the family when health insurance runs out and the expenses continue for the benefit of a patient who can never recover.
A Life Estate is an asset somewhat like a permanent time share in specific property. Sometimes parents will convey their home to their children so that their home is not potentially lost to the cost of nursing home care (assuming the transfer occurs early enough), and yet available for the use of the former owner for as long as they live. A Life Estate is a document which guarantees the former owner (or anyone) the right to use the property for their lifetime so that they can not be evicted. A Life Estate is usually appropriate in cases of lifetime transfer of homes among parents and children.
A Power of Attorney is a document which authorizes your chosen representative to manage your accounts and affairs during your lifetime in the event that you are unable to do so. A Durable Power of Attorney has additional language which designates that your selected agent continues to be authorized to represent your affairs even if you become incapable of understanding how your affairs are handled.
Probate refers to the process by which an individual qualifies to be appointed by the local Orphan's Court as the representative of the Estate. If the individual is named in a Will, they are called an Executor/Executrix. If there is no Will or if the person(s) named is unable to serve, then a close relative is typically appointed by the Court to represent the Estate and called an Administrator/Administratrix.
The representative of the Estate, whether Executor or Administrator, has significant professional liabilities. They will typically advertise the fact of their appointment, obtain certificates for the Court authorizing them to transfer assets, prepare a timely Inheritance Tax return and pay Inheritance Tax to avoid penalties. They will obtain preparation of final Estate and Federal Income Tax Returns, liquidate or distribute in kind non-cash assets, preserving those assets until sale or distribution and eventually they will finish up the Estate by either getting written consent from all beneficiaries to consider the administration complete or by getting formal approval from a judge in the county Orphan's Court. Various notices and certifications must be filed at various times. Release by the beneficiaries requires special documents to be binding on the beneficiaries. Preparation of an accounting in court involves a complex and rigid format, advertising and court appearances.
Sometimes a beneficiary who is not the representative of the Estate will fail to receive their rightful inheritance. Sometimes, a forged or superseded Will or Will with forged portions is submitted to probate. Sometimes, the decedent's assets are sold for less than fair value to friends of the Executor. Sometimes a Will is purposefully destroyed after the Testator's death. Sometimes valuable Estate assets disappear without accounting. These matters, so-called Will Contests, are typically resolved by litigation in the Orphan's Court. Mr. Gold is an experienced trial lawyer and handles Will contest in Bucks and Montgomery Counties.Mr. Gold offers a free consultation on estate planning and administration matters.