FAQ’s – Frequently Asked Questions

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Estate Planning - Wills, Power of Attorney, Living Wills
What is an Estate Plan?
Why do I need an Estate Plan?
I thought Estate Plans were more complicated and only for wealthy individuals?

Wills
What is a Will?
Why do I need a Will?
Can I prepare a Will myself?
Who needs a Will?
Is a Will important if I have children under the age of 18?
How often should my Will be updated?
Can I change my Will?
What is a Codicil?
What information is needed to prepare a Will?
What is Real Property?
What is Personal Property?
What is considered the Residue of the Estate?
When does a Will become effective?
Am I required by law to have the signing of my Will witnessed?

Living Will
What is an Advance Health Care Declaration (Living Will)?
Who may create a Living Will?
What types or procedures may be refused?
When does a Living Will become effective?
Can I appoint a loved one to make my decisions for me?
Does having a Living Will Affect My Insurance?
What is a Health Care Power of Attorney?
What is the difference between an ‘Advanced Health Care Declaration’ and a ‘Health Care Power of Attorney’?
Can these documents be terminated or destroyed?

General Durable Power of Attorney
What is a General Durable Power of Attorney?
Why is a General Durable Power of Attorney needed?
What types or powers or duties are found in a General Durable Power of Attorney?
Can I prepare a more specific type of Durable Power of Attorney?
Who should be my Agent?
Business Planning & Formation - under construction

Probate & Estate Administration
What is Probate?
What is Estate Administration?
Why is Probate necessary?
Do I need an Attorney for this process?
Where do I Probate a Will?
What is an Executor/Personal Representative/Administrator?
How long do I have to complete the Probate process?
What are the costs of Probate?
What happens of an Individual dies without a Will (Intestate)?
What are considered Probate assets?
What is the Inheritance Tax? How much does the Estate have to pay?
What is a ‘Short Certificate’?
What are Letters Testamentary and Letters of Administration?
What happens if an Individual dies owning property and no Probate is started and/or no Inheritance Tax is paid?
What if an individual dies who owns me, or my business money?
Where can I obtain the Inheritance Tax Forms for the REV-1500?

Living Trusts
What is a Living Trust?
What are the disadvantages of a Living Trust?
What is the difference between a Revocable and Irrevocable Trust?
How does a Living Trust differ from a Will?
Will I save money on the Inheritance Taxes by having a Living Trust?
Is a Living Trust less expensive to administer then a Will?

Estate Planning

What is an Estate Plan? An estate plan, at its most basic level consists three legal documents. A Will, a Power of Attorney, and a Living Will (or Health Care Power of Attorney). All three of these documents are an important part of an Estate Plan, as you will see below.

Why do I need an Estate Plan? If you are currently married, retired, widowed, or have a child you probably need an Estate Plan. Each legal document in an Estate Plan serves and unique and important purpose. To learn more about Wills, Powers of Attorney or Living Wills see below.

I thought Estate Plans were more complicated and only for wealthy individuals? Estate Plans can be more complicated, depending upon your financial status, family situation, etc. In some cases, Federal Inheritance tax issues arise, trusts may be needed, or a Living Trust may be preferred. But the bottom line is people of all means and income levels need an Estate Plan.

Wills

What is a Will? A Will is a document written for the purpose of ensuring the distribution of property and assets at your death to persons whom you specify within the will. It lets you choose the Executor of your estate and can address other concerns you may have as well. Any person 18 years of age and over, and of sound mind, may create a Will. A Will is not required by law, but as you will see below, is highly recommended.

Why do I need a Will?
In Pennsylvania, as in most states, you die either testate (with a Will) or intestate (without a Will). Either way all of the property and assets you own at the time of your death must pass through Probate. (see definition below)

If you die intestate you have no choice in deciding to what heirs or beneficiaries your property is distributed. Pennsylvania has strict statutory guidelines governing how and to whom the assets will be distributed.

You also will not be able to choose the Executor or Personal Representative over your estate. Normally, great care should be taken in choosing your Personal Representative as they will be the individual administering the estate, gathering assets and making distributions to heirs. Not having a Will could give rise to great controversy among remaining family members as to who should be chosen to administer your estate, and may result in a family member you may not trust, nor have faith in, being appointed.

The only way to make sure your property and assets go to the family members or individuals you desire, and to have a Executor you trust administering your estate is to have a Will. A Will is the only way your family members will know your exact wishes when you die.

Can I prepare a Will myself?
Anyone can prepare a Will without the advice or consultation of an Attorney, but it is not recommended. There are many steps and procedures required to make sure a Will is valid for Probate. An improperly prepared or invalid Will could cause the estate to be deemed intestate or allow for family members to contest the Will. This could lead to added legal fees for the estate, stress and controversy for your remaining family members, and subject your property to distribution against your wishes.

Who needs a Will?
Any Individual 18 years of age or older can make a Will. Young married couples, parents of minor children, parents of special-needs children, middle-aged couples and individuals, retired couples and individuals, and widows, are just a few examples of those who need a Will or Estate Plan.

Is a Will important if I have children under the age of 18? Yes, a Will is extremely important if you have minor children (children under the age of 18). A Will can appoint a Guardian over the minor child and over the inherited property received through the Will. If no Will is present the Orphan’s Court must choose and appoint the Guardians over the minor and inherited property may not become available until the child turns 18. This could cause great controversy between remaining family members and loved ones.

How often should my Will be updated? We recommend that you review your Will every 5-10 years or after any significant ‘life-altering’ event. Examples of such an event include the purchase of a home or business, birth of a child, adoption, sudden influx of cash, divorce, death or other changes in personal relationships, among others.

Can I change my Will? Yes, you can destroy your Will at anytime, as long as that is your intent, and write a whole new Will. You can also amend your Will through a Codicil, which does not destroy but adds to or amends the Will.

What is a Codicil? A codicil is an amendment to a Will. It does not supercede your current will, but ADDS to it. A codicil is a good way to add to your current will without having to redo the whole Will. If you have a ‘life-altering’ event, but do not wish to redo your whole Will, then a Codicil may be right for you. Examples of such an event include the purchase of a home or business, birth of a child, adoption, sudden influx of cash, divorce, death or other changes in personal relationships, among others

What information is needed to prepare a Will? At the most basic level, you need to know what Real Property and Personal Property you currently own and who you would like to receive this property upon your death. You can divide this property either as a percentage of assets or bequeath to specific individuals. You must also name an Executor for your estate, cite any specific funeral or burial requests, and appoint Guardianship if you have minor children.

What is Real Property? Real Property is any property that includes land and anything that may be permanently attached to that land, such as buildings, stationary homes, trees, etc.

What is Personal Property? Anything you own that is not Real Property is Personal Property. Including, but not limited to cars, bank accounts, wages, securities, a business, household furniture and furnishings, books, pictures, jewelry, watches, patents, and pets are all examples of personal property. Personal property may also be called personal effects, movable property, goods and chattel, and personalty.

What is considered the Residue of the Estate? The property that remains in a deceased person's estate after all specific gifts or real and personal property are made, and all debts, taxes, administrative fees, probate costs, and court costs are paid. The residuary estate also includes any gifts under a will that fail or lapse.

When does a Will become effective? A Will becomes effective at the moment the individual dies.

Am I required by law to have the signing of my Will witnessed? No. The law does not require eyewitnesses to the actual signing of the Will. However, most counties, including Allegheny County, require that two (2) witnesses be present at the Register of Wills office when Probate is opened to identify under oath the signature of the decedent. In order to avoid this hassle, it is always recommended that two (2) individuals witness the actual signing of the Will at the time of execution.

Living Will

What is an Advance Health Care Declaration (Living Will)? More commonly know as a Living Will, the document states that you do not want medical care to keep you alive if you are terminally ill or in a state of permanent unconsciousness. It allows you to retain control over your wishes in the case that you arer incompetent and unable to communicate your wishes to your doctor, family and friends.

Who may create a Living Will? Any individual who is 18 years of age or older and of sound mind may execute a declaration. In addition, any individuals who are married or are high school graduates may also make and sign a declaration. The declaration must be signed by the declarant and must be witnessed by two individuals over the age of 18.

What types or procedures may be refused? There are seven different types of life-sustaining procedures that may be specifically refused. These procedures include Cardiac resuscitation, Mechanical respiration, Tube feeding or tube hydration, Blood transfusions, Surgery or invasive diagnostics, Kidney dialysis, and Antibiotics.

When does a Living Will become effective? A declaration becomes effective when the attending physician makes a written diagnosis that the declarant is incompetent (i.e., unable to make or communicate decisions) and in a terminal condition (i.e., an incurable and irreversible condition which will result in death), or is in a state of permanent unconsciousness (i.e., an irreversible coma). A second physician must also confirm the diagnosis in writing.

Can I appoint a loved one to make my decisions for me? Yes, you can appoint what is called a “surrogate” to make your medical treatment decisions for you if you become incompetent. A surrogate is instructed to carry out your wishes written in the declaration, therefore the surrogate should be aware of their role and willing to carry out your wishes and desires.

Does having a Living Will Affect My Insurance? No. It is against the laws of the Commonwealth of Pennsylvania to allow a Living Will declaration to affect any life insurance or health care insurance policies.

What is a Health Care Power of Attorney? A written document authorizing an appointed agent to make health care decisions for you in the event you are unable to communicate these decisions yourself. The document contains instruction and guidelines regarding your medical care for your agent to follow.

What is the difference between an ‘Advanced Health Care Declaration’ and a ‘Health Care Power of Attorney’? A Health Care Power of Attorney applies to ALL medical situations, not just those involving a terminal condition or state of permanent unconsciousness.

Can these documents be terminated or destroyed? A declaration can be revoked at any time and in any manner, regardless of the mental or physical condition of the declarant. It is best to do so in writing or directing communicating your wishes to your physician, surrogate, agent or other qualified person.

General Durable Power of Attorney

What is a General Durable Power of Attorney? It is simply a written document that authorizes an appointed ‘Agent’ to act on your behalf. The term ‘durable’ allows the Power of Attorney to remain effective after a disability occurs such as becoming physically or mentally incapacitated. A Power of Attorney is only effective while the individual is alive. This document can be a very powerful tool, as it allows the Agent to take your place and make decisions regarding all of your property and assets.

Why is a General Durable Power of Attorney needed? It is needed in the event that you become physically or mentally incapacitated and are unable to communicate decisions or perform your day-to-day affairs. For example, it allows the agent to perform routine banking affairs, such as writing checks for bills, depositing money, or entering a safety deposit box. Other duties may include speaking with life or health insurance agents, maintaining the day-to-day operation of a business, or making investment related decisions.

What types or powers or duties are found in a General Durable Power of Attorney? Powers granted include the following transactions; real and personal property, securities and investments, banking, business operation, insurance, estate and trust, litigation, social security, medicare, medicaid, retirement plans and tax matters.

Can I prepare a more specific type of Durable Power of Attorney? Yes, you can specify what specific powers the Agent has a duty to control. One common example is a Restricted Business Power of Attorney, which only grants the Agent power to control duties involving a specific business or corporation.

Who should be my Agent? An Agent should be someone you highly trust, as they will have the right to control over all of your assets and property, and the right to make important decisions on your behalf. A trusted spouse, parent, sibling or child are all good examples of a properly appointed agent.

Probate & Estate Administration

What is Probate? Probate is the legal process of proving a Will to be valid or invalid upon death according to the laws of the Commonwealth of Pennsylvania. A Will is probated after the individual dies. This authorizes a Personal Representative (or Executor) to administer the estate assets, pay debts and taxes of the deceased and distribute assets to heirs and beneficiaries. In the state of Pennsylvania, if you die owning real or personal property those assets will be subject to Probate.

What is Estate Administration? This involves the collection of assets, payments of creditors, debts, taxes and other expenses, and distribution of assets to heirs or beneficiaries.

Why is Probate necessary? The probate process is required by law for any decedent who resides in Pennsylvania at death and any non-Pennsylvania resident who owns, or has an interest in, property in Pennsylvania.

Do I need an Attorney for this process? An Attorney is not required by law, but is highly recommended. Unless you are familiar with the Probate process and know exactly how, what and when to perform each step, it is recommended that you contact an Attorney.

Due to possible litigation the Register of Wills office will NOT be able to help or instruct you in any manner with questions you may have in administering the estate, nor can they aid in helping you prepare any forms associated with the Probate process. If you need help, contact an Attorney.

A family member has died. What should I do first? Make sure the home and the deceased’s possessions are intact. No family members or other individuals should begin to take possessions from the home. The assets must be cataloged for the inheritance tax return and the decedent’s will must be referred to before any distributions to heirs may occur. Then contact an Attorney.

Where do I Probate a Will? Wills are probated at the Register of Wills office in the county where the decedent was domiciled at death, or the county where the non-resident decedent owned property.

Who is responsible for beginning the Probate process? The Personal Representative (Executor or Administrator) of the decedent’s estate.

What is an Executor/Personal Representative/Administrator? All of these terms refer to the individual sworn and appointed by the Register of Wills to represent and administer the decedent’s estate. The Duties of the Personal Representative include the collection of assets, payments of creditors, debts, taxes and other expenses; and distribution of assets or heirs or beneficiaries.

How long do I have to complete the Probate process? An inheritance tax return must be filed no later than 9 MONTHS after the date of death. An extension of time can be requested but in most instances should not be needed.

What are the costs of Probate? Costs vary depending on the county where the decedent was domiciled. Associated fees include, but are not limited to Register of Wills fees, estate notice publication fees, and attorney’s fees

What happens of an Individual dies without a Will (Intestate)? If there is no Will the Probate process remains basically the same, but some of the terminology changes. An Administrator must be appointed based upon the Intestate Succession Laws. The decedent’s estate is distributed based upon a statutory formula set forth by Pennsylvania law which decides to whom and in what amount assets are to be distributed.

What are considered Probate assets? Subject to exceptions (see below), Any real property, personal property or assets you own at the time of your death passes through Probate. If you are married, any property owned by husband and wife (tenancy by the entireties) will bypass probate and pass directly to the surviving spouse. Any property or assets held ‘Jointly with Right of Survivorship’ will also bypass Probate and go directly to the other individual(s) with whom you held the property. For more specific questions it is recommended that you contact an Attorney.

What is the Inheritance Tax? How much does the Estate have to pay? Basically, the inheritance tax is based upon the property and assets you own at the time of your death minus certain deductions. The inheritance tax rates are as follows;
1. 0% on transfers to spouses and charities
2. 4.5% on transfers to “lineal” descendents (parents, grandparents, children, grandchildren, sons and daughters in-law)
3. 12% on transfers to siblings (brothers and sisters)
4. 15% on transfers to ANY other person.
If the tax is paid within three (3) months of the decedent’s death a discount of 5% off the TAX DUE (not the total estate assets) is allowed for whatever portion of tax is paid. For more information regarding the inheritance tax it is suggested that you contact an Attorney or Accountant.

What is a ‘Short Certificate’? A Short Certificate is a certification that a probate/administrative proceeding has begun and is on file at the Register if Wills office where the decedent was domiciled, and that a Personal Representative has been appointed.

What are Letters Testamentary and Letters of Administration? These are documents issued by the Register of Wills office which authorize an individual (usually the Executor) to act as the Personal Representative and administer the decedent’s estate. It gives the individual the authority to gather assets for payment of outstanding bills, payment of the inheritance tax, to request and access records, and make distributions.

Are Probated Wills available to the public? Yes, but only Wills that have previously passed through Probate. Wills of individuals currently living are not available. The original Will and the Inheritance Tax Return are required by law to be held at the Register of Wills office in the county where the individual as domiciled at death (unless impounded by Court order).

What happens if an Individual dies owning property and no Probate is started and/or no Inheritance Tax is paid? The statutory penalty for willful failure to file an inheritance tax return is 25% of the tax due or $1,000.00, whichever is less. Filing a willfully false return is a third-degree misdemeanor.

What if an individual dies who owns me, or my business money? The Executor of the Estate must place an Estate Notice in the local newspaper within the decedent’s County and the County’s Legal Journal, usually for 3 consecutive weeks. Look for this notice in the classified section and contact the Executor or Attorney listed regarding your debt.

Where can I obtain the Inheritance Tax Forms for the REV-1500? The local Register of Wills office should have a booklet of forms along with instructions. You may also download the forms from the PA Department of Revenues website.

If you have any questions regarding the Inheritance Tax contact an Attorney or Accountant or call the Department of Revenues Information Line at 717-787-8327.

Living Trusts

What are the advantages of a Living Trust? A living trust avoids probate and therefore gets assets distributed significantly more quickly than a will does. It also offers a higher level of confidentiality, as probate proceedings are a matter of public record. Additionally, trusts are usually harder to contest than wills.

What are the disadvantages of a Living Trust? On the downside, a living trust takes longer to put together than a will, and requires more ongoing maintenance. Although both a will and a living trust can be modified or revoked at any time before death, such changes are slightly more time-consuming for a living trust. Additionally, assets that a person wants to move to a living trust, such as real estate and bank or brokerage accounts, have to be retitled. Also, establishing a Living Trust is often more expensive than your normal Will or Estate Plan because of the additional legal work involved.

What is the difference between a Revocable and Irrevocable Trust? A revocable trust may be amended, altered or terminated during the trustor’s lifetime. An irrevocable trust may not be changed or terminated without the consent of the beneficiaries. Most Living Trusts are prepared as Revocable trusts.

How does a Living Trust differ from a Will? A Living Trust and a Will are two separate legal documents. If a Living Will is prepared a Will must still be created and will refer to the Living Trust as the governing legal document for the distribution of assets at the time of death.

Will I save money on the Inheritance Taxes by having a Living Trust? No, all assets of a Living Trust are subject to the Pennsylvania Inheritance tax even though they do not pass through the probate process.

Is a Living Trust less expensive to administer then a Will? Usually it is not. The administration of a Living Trust is very similar to administering a Will with the exception that it avoids the Probate process. The appointed Personal Representative must still collect the assets, pay creditors, debts, taxes and other expenses; and distribute assets of heirs or beneficiaries.

THIS INFORMATION IS FOR EDUCATION PURPOSES ONLY AND IN NO WAY SHOULD BE CONSIDERED LEGAL ADVICE. IF YOU NEED LEGAL ADVICE CONTANT AN ATTORNEY. THIS INFORMATION IS FOR THE COMMONWEALTH OF PENNSYLVANIA ONLY.