Common Estate Planning Errors that May Have Unintended Consequences

Having a solid estate plan in place is important to ensuring that your wishes are carried out and your family is taken care of. Regardless of the size of your estate, attempting to create an estate plan on your own can lead to costly mistakes down the road. Being aware of these common estate planning mistakes, and seeking the counsel of an experienced Pennsylvania estate planning attorney, can help to ensure all of you are well prepared for whatever may come your way.   

Only Having a Will

A last Will and testament is not a complete estate plan. It is critical to consult an estate planning lawyer to find out how to best protect your interests and your beneficiaries. The best estate attorneys will do a comprehensive review of your assets and finances, talk with you about planning for incapacity, ascertain your family circumstances, and advise you on whether trusts would provide any benefit to you or your loved ones.  

Failing to Create Powers of Attorney for Finances and Health Care

Many people have the misconception that creating a general durable Power of Attorney [POA] will give your agent control over your health care decisions and financial matters. Being as specific as possible in a POA can help to ensure your rights are protected and your desires are carried-out as you intended if you become incapacitated. 

A Durable Power of Attorney for Health Care, also referred-to as a Health Care Directive, allows your designated agent to make medical decisions on your behalf, and also enables you to specify your wishes for end-of-life decisions if you are unable to make them yourself. A Durable Power of Attorney for Finances gives your agent the ability to handle your finances in the event of incapacity. While most people choose the same person for both types of POA, some prefer to name separate trusted individuals to manage their health care decisions and finances. Attorneys who specialize in Wills are knowledgeable about how Powers of Attorney should be drafted. 

Misunderstanding the Implications of How your Assets are Distributed

Even if you have a Will, some assets like life insurance and retirement accounts are not typically controlled by your Will and do not have to pass through probate. This can lead to problems if you fail to update beneficiaries after major life changes like divorce or the death of a spouse. In addition, understanding which assets may be subject to estate and income taxes can help your beneficiaries keep more of their inheritance in the long run. 

Other actions that you may think are beneficial, such as adding your adult child to the title of your home or other property, attempting to plan your estate around specific assets, or failing to create trusts for minor children and loved ones who are not good at managing money can have disastrous unintended consequences. A probate lawyer can help you understand how certain estate planning documents like trusts can be effective ways to simplify things and reduce the amount of time and money your beneficiaries spend on settling your estate.  

These are just a few common estate planning mistakes that can throw a wrench into even the best-laid plans. An experienced attorney can help you sort it all out and create a solid estate plan that gives you peace of mind.

This blog was originally posted on https://www.pa4law.com/common-estate-planning-errors-that-may-have-unintended-consequences/

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Thinking If Probate Is Necessary? 3 Things That Could Happen If You Do Not Probate A Will.

Very often, Wills are written many years before a person passes away. In the Will, the person names an executor for the Will. An important part of the executor’s job is to probate the Will after the person’s death. What happens if the executor is no longer living or simply decides he or she no longer wants to be executor? Based on our experience as a probate law firm, three things are likely to happen if the Will is not submitted to probate:

1. Penalties

You are not legally required to serve as someone’s executor, even if you promised to do so at one time. However, that does not mean you can just set aside a Will and ignore it. The Will must be turned-over to someone who will properly handle it so that the deceased person’s estate does not suffer damages such as late tax payments, and so the beneficiaries of the estate can be distributed their rightful inheritances.

Attorneys who specialize in Wills know the dangers of not properly handling a Will after the death, including the named executor possibly becoming the subject of a civil lawsuit by someone who believes they were financially damaged by the failure to file the Will. Most states have a requirement that a Will be filed within a certain amount of time, ranging from 30 days to three months. If a Will is not filed within the state’s time limit, there usually are consequences.

If the named executor endeavors to hide the Will for his or her financial gain, the executor may be criminally liable. Let’s say a parent left the entire estate to his or her church and left nothing to the only child. If the child decides not to file the Will, the laws of intestate succession likely allow the child to receive the estate, and the named beneficiary (the church) would get nothing. This deception would likely be interpreted as a criminal act.

2. Creditors’ Claims

Usually there are unpaid bills when a person passes away. It is the executor’s job to pay the bills to creditors who make a timely claim. Probate will limit the amount of time a creditor has to submit its claim. The executor may reject the creditor’s claim if it is not filed within the allotted amount of time.

What happens if there is more debt than assets in the estate? This is called an insolvent estate. The family of the decedent is not obligated to pay these debts, but the law sets forth a priority and method for the estate to partially pay these debts.

3. Transferring Title

Probate will allow the executor to more easily transfer title to property to the Will beneficiaries. But what happens if the estate is very small, with title to one piece of property as the only asset? The best estate attorneys suggest that there is a streamlined process in many states called “transfer by affidavit.” This may allow the executor to transfer the title without going through probate. State law dictates the maximum fair market value for property that can be transferred in this way.

If you are an executor of a Will or are in possession of an original Will, it is important to speak with an experienced attorney at Perna & Abracht LLC right away. Every state has its own laws regarding Wills and probate, and you need the most-current advice to avoid unintended or unexpected consequences.

This blog was originally posted on  https://www.pa4law.com/thinking-if-probate-is-necessary-3-things-that-could-happen-if-you-do-not-probate-a-will/

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