The Basics of Estate Planning


Estate planning means more than just planning for death.  Estate planning should provide planning for injury, and physical or mental disability.  Estate planning must be rooted in what you want for yourself and for your loved ones now, during life.  For many people, estate planning also means planning to pass on a family business, a family farm or land.  Estate planning when done correctly should allow you to pass on lessons, information, and family values that you may not have had the opportunity to fully teach during your lifetime.


Estate planning also means a review of your assets, life insurance policies, and beneficiary designations, to make sure that any taxes get paid from the correct source, and that your plan really works.  In short, estate planning is often much more than a will or a trust.


Having said that, there are several basics that should be included in every person's planning documents.


Planning for Disability


What if you were to be suddenly incapacitated?  Who could legally handle your affairs?  Many people mistakenly believe that a spouse or loved one can act automatically.  But, without planning, a guardianship would be required and that would mean court supervision.


Estate planning for disability should include a plan to take care of your personal decisions and it should also take care of your financial decisions. If your estate plan does not include a plan for both your personal and financial decisions your assets could end up in a court supervised guardianship.


1. The legal document that will delegate your personal decisions is called a Medical Power of Attorney. It allows you to give to the person of your choice the right to take care of your personal needs and to make medical decisions if you cannot temporarily or permanently do so.


2. The legal document that will delegate your financial decisions is called a Financial Power of Attorney. This will allow you to choose someone to manage your assets if you are unable to do so.


a.  A “durable” Power of Attorney means that the person you choose to delegate your financial decisions will have the immediate ability to take care of your property and will continue to be able to take care of it even if you’re determined to be mentally incapacitated.


b.  A “springing” Power of Attorney means that the person you choose will not be able to manage your assets until after you are determined to be mentally incapacitated.


Planning for Death


Estate planning for death should insure that all of your debts be paid and will determine who will receive the remaining balance of your assets. It can also determine who controls the assets for a minor child and grandchild and how and when those assets are distributed.  This plan can also appoint a guardian to care for a minor child and can dispose of assets in a way that eliminates or minimizes taxes.  Finally, a well constructed plan can protect your heir’s inheritance from lawsuits and divorce.  It should do all of these things in a way specifically developed with your estate planning goals as the driving force.


The most commonly used document for basic estate planning in Pennsylvania is called a Last Will and Testament. A will is a written set of instructions on how you want your estate handled after your death.  While a will is subject to probate, in Pennsylvania, probate is neither onerous nor time consuming.  Pennsylvania is a high inheritance tax state (and taxes revocable trusts and wills in the same manner).  For that reason, many Pennsylvania residents opt for this less expensive planning option.  However, in some cases, because of age or infirmity, liability exposure, or the location of certain real estate in other high probate fee states, it might be important to consider a revocable trust as the primary estate planning tool.


A Revocable Living Trust can be used along with the other legal documents already described to plan for disability and death. A Revocable Living Trust allows you to control your property while you are alive and mentally sound. The trust allows you to choose a person to manage your finances if you become mentally disabled and list your instructions to your family or loved ones as to what you want done with your assets after you die. The benefit of using a Revocable Living Trust is your family or loved ones will have immediate access to your assets after your death because property held in the trust will avoid probate.




The basics of estate planning include planning for disability and planning for death. A Medical Power of Attorney (often coupled with a Living Will that sets out specific desires about medical care) and “durable” and/or a  “springing” Power of Attorney help you plan for mental disability. A Last Will and Testament and a Revocable Living Trust help you plan for your death in a way that carries out your wishes and can minimize taxation and probate fees.


Additional planning techniques are numerous and can include irrevocable trusts, family partnerships and LLCs, Grantor Retained Annuity Trusts, Qualified Personal Residence Trusts and many other specific tools.  These tools and techniques are the subjects of additional articles in this series.


 David M Frees III


Research: Whitney O'Reilly

David M. Frees, III
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Attorney, Speaker and Author