Items in your estate such as a Pennsylvania home, a car or funds in a bank account will need to be accounted for after your death. You can do this by using a will or by shifting assets outside of your estate through a trust. A trust can also be used to manage your affairs during your lifetime without the need for a power of attorney or medical directive form.
Start with a will or trust
A will dictates how assets should be allocated after you pass away, and if you don’t have a will, state intestacy law will govern. This means that your parents, siblings or children will get your stuff as opposed to your best friend, a charity or some other intended beneficiary. Trusts can be helpful estate planning tools as they protect assets from creditors or from being seized in a divorce. Furthermore, assets in a trust typically avoid probate, which can make it easier to settle your affairs in a timely manner.
Add a medical or financial agent
If you have a trust, your trustee can serve as your medical or financial agent. Otherwise, you will need to specifically grant an outside party the power to pay bills or authorize medical treatment on your behalf. A trustee or agent can be anyone who is 18 or older and is of sound mind. You can either grant those powers on an ongoing basis as soon as the document is executed or grant them on a springing basis. For instance, a financial agent may only have the ability to manage your money after a specific event occurs such as a major surgery or while you’re out of the country.
Having a comprehensive estate plan provides you with an opportunity to preserve assets during your lifetime. It also provides you with an opportunity to allocate those items in a timely manner after your death. This may reduce the risk of family infighting or other problems arising that can prevent beneficiaries from receiving an inheritance.