Estate Planning, Administration & Litigation
Each of our attorneys have substantial experience preparing wills, living wills and powers of attorney. We counsel clients on medical assistance eligibility planning and prepare a wide range of trust documents, including supplemental needs trusts. In the administration area, we provide counsel to personal representatives of estates and trustees. Our litigation experience includes will contests, contested guardianship appointments, and breach of fiduciary duty claims against agents serving under a power of attorney.
Pennsylvania law allows for self-proving Wills for use in probate court at the time of death. Self-proving Wills are those which contain signatures from two witnesses with an attestation from a Notary that the witnesses observed the person sign the Will. In addition, with a Notary attesting to the signature of the person signing the Will, a self-proving Will can be accepted by the probate court without testimony from witnesses or other evidence. Wills are limited to directing the distribution of probate property which encompasses only property titled in the sole name of the decedent. Property passes independently from the direction in a Will if it is held in joint names, subject to a "trade-on-death" designation or subject to a beneficiary designation. Typical assets held in joint names include real estate and some bank accounts. Assets usually subject to beneficiary designations are retirement plans, IRAs and life insurance. For a proper estate plan, it is important to coordinate distribution provisions in a Will with the distribution provisions of assets which are not subject to the distribution under the Will.
Durable Powers of Attorney
Durable Powers of Attorney direct the handling of a person's financial matters prior to death in the event they do not have the physical or mental ability to act on their own. The person signing the document and authorizing the transactions is the Principal and the person or persons appointed to handle matters during incapacity are the Agent. It is critical to select an Agent, or Co-Agents, who are familiar with the Principal's financial matters and are completely trustworthy in honoring and accepting the fiduciary duties owed to the Principal.
Medical Powers of Attorney
Medical Powers of Attorney are used to designate a person to handle decisions such as medical treatment and placement in the event of incapacity. The person signing the document and providing the instructions is the Principal and the person(s) designated to handle the matters in the event of the Principal's incapacity is the Agent. It is important only to provide such powers to an Agent who is trusted and has the complete confidence of the Principal. An additional component to a Medical Power of Attorney can be a Living Will or Advanced Directive which sets forth the intent of the Principal concerning extraordinary medical treatment in the event the Principal has been determined to be in a terminal condition with no hope of recovery.
Revocable Living Trusts
Some individuals and couples use Revocable Living Trusts to direct the distribution of property at death for the primary purpose of avoiding the probate process at death. While this option does save some money and time, probate is only avoided if title to all of the assets are transferred to the name of the Revocable Living Trust before death. This may require significant legal work to re-title property such as preparing and filing deeds for real estate, changing beneficiary designations and re-titling stock, bonds and bank accounts. Often times the cost of this legal work will not be significantly less than the legal fees for probate. However, using a Revocable Living Trust keeps the information regarding the probate assets and the beneficiaries more private because Inventories and Receipts are not filed with the Register of Wills. A Revocable Living Trust does not save inheritance tax or income tax.
Irrevocable Living Trust
Individuals and couples use Irrevocable Living Trusts if there is a need to give property to others without retaining any right of ownership, or any right to revoke the transfer. This may be done for elder law planning purposes in order to qualify for veteran's benefits or other forms of public assistance. Individuals can retain the right to use income, such as rent from real estate, on property which is conveyed to an Irrevocable Living Trust. The gifting rules that apply to individuals who apply for public assistance include transfers to Irrevocable Living Trusts. Therefore, transfers of property to Irrevocable Living Trusts must be planned only after considering the potential for a future application for public assistance.
Supplemental Needs Trust
Individuals often use Supplemental Needs Trusts as part of a Will in order to direct an inheritance to disabled beneficiaries without having the inheritance be considered an asset when the disabled beneficiary is seeking various forms of public assistance. A Supplemental Needs Trust must contain specific direction that it only be used to supplement a beneficiary's existing assets and income, rather than be used for the basic support needs of a beneficiary. It usually directs the trustee for the beneficiary to seek any available public assistance in lieu of using income or assets from the Trust. Without a Supplemental Needs Trust in a Will, a beneficiary who is already receiving public assistance at the time of inheritance will risk the loss of further public assistance payments until the inheritance is spent down by the beneficiary.
Child Support Trusts
Individuals with children under the age of 30 often include Child Support Trusts as a component of their Will. Rather than making a direct distribution to a child, it is common to leave the distribution to an adult person serving as Trustee for the child with the direction to use it for support, maintenance and college expenses. The Child Support Trust provisions are critical for children under 18 because Pennsylvania law requires either a restrictive bank account or court proceeding to separately establish a Trust for minors. It is also useful to include the Child Support Trusts for children in their twenties so parents can be assured that the money will be used for proper purposes until a Trustee determines that financial management is no longer necessary. As part of many estate plans, it is also necessary to have beneficiary designations for life insurance policies, retirement assets and individual retirement accounts designate the Child Support Trust as a beneficiary, rather than directly name the child as the beneficiary. Otherwise, the child inheriting can request the distribution in a lump sum outside of the restrictive and protective trust provisions.
Please Contact Chuck Merchant