Future planning and decision making can be a challenge. Planning can be even more complex when it involves plans for your estate. However uncomfortable the idea, the truth is that regardless of your age, income and or civil status, making plans for your properties and assets and affairs in advance gives you an opportunity to clarify your intentions and wishes.
Also keep in mind that estate planning is about more than just distribution of your assets. Estate Planning also includes appointing individuals to make medical or financial decisions on your behalf if you are unable.
What Can Happen Without a Plan
More than half of the population in the US over 55 years old die without having their properties arranged as they intended. They do not have a will, making it difficult or impossible for loved ones to have a say in their property distribution.
When a person dies intestate (without a will), the distribution of their assets depends on what is stated under the law in the state they live in.
In the case of a single person dying without a will in Pennsylvania, here is what they can expect to happen to their assets:
- All of the assets would be transferred to their children, or grandchildren, in equal shares (if they have any).
- If they have no children, all their assets would be transferred to their parents in equal shares.
- If they have no living parents, all the assets would be transferred to their brothers or sisters, if any of their brothers or sisters have passed away and left children (nieces and nephews), their children would inherit their share.
- If they have no brothers, sisters, nieces or nephews, all of the assets would pass to their living grandparents in equal shares, if both maternal and paternal grandparents have passed away, their children (aunts & uncles) would inherit their shares.
- If there are no aunts or uncles living, then it would pass to their children (cousins).
- If there are no cousins living, the estate would pass to the Commonwealth (escheat).
How to Start Setting Up Your Wills and Trusts
If you have plans for your assets or specific wishes, it is important to spell out those wishes in a will or trust. These legal documents help ensure final wishes are fulfilled. If you are familiar with how wills and trusts work for couples, know that the process is different for single people. Here are the main differences:
- A typical scenario for married couples is to designate one another as the beneficiary should anything happen. A single person needs to be particularly careful in choosing which family member or friend to name.
- A spouse may leave their property to their partner without paying any Pennsylvania Inheritance taxes. Single individuals would need to pay Inheritance taxes which can range between 4.5% and 15%.
Other important things to note:
- Make sure to consider your beneficiaries designations with any life insurance, retirement accounts, or P.O.D. accounts. Your will can only control your “probate assets.” If you choose to give your assets to your mother in your will, but in your life insurance, your father is named, then the life insurance proceeds would go directly to your father, regardless of what is stated in the Will. Be sure that all your documents are aligned if you want your property to end up with the right person.
Always consult with a local estate planning attorney to best understand your specific situation.
Creating your estate plan while your young and healthy can avoid complications and can provide peace of mind knowing that your affairs are well in order. An experienced estate attorney can help and understands the ins and outs of the process, can answer any concerns you have and help you customize a plan to meet your needs – whatever your marital or financial status.
Need a will & estate planning service in Wormleysburg, PA? Cherewka Law has been committed to assisting people in protecting what is important to them for over 30 years. We provide comprehensive, highly personalized planning services to individuals, couples, families, and businesses in estate planning, estate administration, and more. Contact us today.