Estate Planning : Wills, Powers of Attorney, and Trusts

Executing your Last Will and Testament, Durable Financial Power of Attorney, Health Care Power of Attorney, and Living Will is an important step to take for adults of ALL ages and wallet size. Keystone likes to refer to the estate planning documents as foundational documents. In addition, Keystone can help you with inheritance tax and estate tax planning, special needs planning, retirement planning, trusts and any other estate planning matters. Life sometimes presents the unexpected, and circumstances can change in a matter of seconds. While completion of these documents leads us to think about situations that usually aren’t pleasant, we can have peace of mind that should an event occur that impairs our ability to function independently, we still have some control over decision-making because our wishes have been clearly written down.

The most common document that people think about is a Last Will and Testament.  This document dictates what will happen to your property after you pass away. It allows you to choose “who gets what” (your beneficiaries), who will be in charge of overseeing the process (your executor), and who you wish to be guardian of any minor children or dependents. If you pass away without a will, the state will make these decisions for you, and the state’s decisions may be different from what you would expect.  For example, if you pass away and have surviving children, all of whom are children of your surviving spouse also, your surviving spouse will receive only the first $30,000 plus one-half of the balance of the intestate estate.  If you prefer to make your own decisions, clearly a Last Will and Testament is an important document.

Equally important is a Durable Financial Power of Attorney. This document is necessary if you should require assistance with financial matters, such as paying bills or accessing/managing an independently owned bank account.  Without this document, financial institutions will release information only to the owner of the account.  This creates difficulties if the owner is incapacitated, either temporarily or permanently.  Using this document, you can name one or more individuals to act as your “Agent” for the purpose of legal and financial matters.  A Durable Financial Power of Attorney becomes effective either immediately, upon incapacity (if it is “springing”), or for a specific limited purpose, and can only be used while you are alive.  Keystone can help you create a Durable Financial Power of Attorney that will have specific language necessary for protecting assets during a nursing home crisis.  The only other way to access financial information and manage accounts would be through a GUARDIANSHIP, which is a legal process involving the court that is lengthy, stressful, and expensive.

A Durable Health Care Power of Attorney allows you to appoint one or more individuals as your “Agents” to make health care decisions for you if you are unable to make them for yourself.  These decisions can include authorization or refusal of medical treatment, admissions to medical facilities, and hiring/firing of medical professionals.  Another essential element of this document is that it allows your agent to access your private medical information so informed medical decisions can be made.  This information is more difficult to access since the enactment of Health Insurance Portability and Accountability Act (“HIPAA”), which tightened medical privacy regulations.  Your agent(s) should understand your preferences for care so that they can best represent you if the need should arise.

The final document is a Living Will.  A Living Will applies ONLY to end of life health care decisions.  It applies in two specific situations: if you have an end-stage terminal medical condition or if you are in a permanent state of unconsciousness.  In Pennsylvania, a physician must certify that you are in one of these conditions for your Living Will to go into effect.  Decisions in this document about receiving or declining aggressive treatment are very personal and there are no right or wrong decisions.  Designation of a “Surrogate” gives medical professionals an individual to consult with who can clarify your preferences.  Finally, your Living Will allows you to specify any anatomical (organ) donation you would like to make after you are deceased.

These documents are a good place to start if you are beginning to plan for your future.  If you have completed these documents in the past, we recommend that you periodically review them as changes in state law and your life situation may indicate that an update would be wise.  Documents that may have been appropriate for you as a newlywed may not be appropriate anymore now that you are on the brink of retirement.

A Trust agreement creates a new legal entity or legal being. Trusts are useful for a variety of purposes, but may not be appropriate for everyone. Keystone can help you decide if a trust is appropriate in order to accomplish your goals. For example, if your goal is to protect assets from the cost of your nursing care in more than five years from the present time, then an irrevocable trust with specific terms addressing that goal may be appropriate. Keystone’s knowledge of the complexities of elder law will enable you to protect assets from your future cost of skilled nursing care. You may also use a trust to avoid inheritance taxes, estate taxes, and probate, or to help a loved one with special needs without making them ineligible for government benefits, among other uses.

For additional information or questions, give us a call at 717-697-3223.