What is your estate plan?

    submitted by Richard P. Wilson, Esquire,

    Truth be told, it has been reported over the years that only about one-third of the population have wills or any other estate planning documents.

    What are the basics?

    • Will;
    • Durable Power of Attorney (Financial);
    • Durable Power of Attorney (Healthcare);
    • Living Will.

    During your lifetime, the most important document is the Durable Power of Attorney which allows you to access an IRA, 401K or 403(B) for your spouse or some other friend or relative, if you have been named as their agent.

    Also, if your spouse is ill and you are required to sell your property, you can’t without the power of attorney. You would have to be appointed as guardian which is an expensive legal proceeding with annual reports required to the courts on how money was spent on behalf of your spouse. 

    Jointly Owned Property – Unintended Consequences

    If a husband and wife own property jointly, it is protected from creditors if the claim is against one spouse. A husband and wife should not own a vehicle jointly because a claim could be made against both of them as the result of an accident.

    If husband and wife who have no children with jointly owned property only, their property will pass to the heirs of the surviving spouse.

    In a second marriage, if the couple own assets jointly children of either spouse can be disinherited depending upon who survives. Joint ownership of property by parent and child can cause the following problems:

    • It may cause parent to lose the property because of some act of the child
    • The parent could possibly disinherit his other children
    • Inheritance tax would be due if parent survives the child
    • If the property is owned by unrelated people, it is known as tenants in common. Problems can arise if one person wants to sell his portion of the property.

    It has been said that many people have been motivated to do a will when a friend or relative has passed away. Also, if they are heading out on a vacation, the need has become very important.