Understanding the Role and Importance of a Power of Attorney in Pennsylvania

When discussing estate planning with clients, many believe the conversation begins and ends with the creation of a will. While the drafting of a will is a critically important component of a proper estate plan, designating a trustworthy power of attorney cannot be overlooked or treated lightly.

Simply stated, a Power of Attorney (“POA”) is an agent for the principal (the individual naming the POA) who is charged with the obligation of making proper financial and property decisions for said principal. The agent assumes the responsibility of acting on behalf of the principal in the event that the principal is no longer able to act on his or her own behalf, or is otherwise unavailable to conduct a transaction (such as a principal being out of the state or country on the date of settlement for the sale of real estate).

An agent’s responsibilities could include, among many others tasks, conducting financial transactions on the principal’s behalf, paying bills, and maintaining bank accounts. The individual designated as POA need not be a relative, but should certainly be someone the principal trusts in carrying out dealings on his or her behalf. The appointing of a Power of Attorney is not a decision to be taken lightly, and should be based solely on the principal’s best interests.

There are several types of powers of attorney, including a general power of attorney, a limited power of attorney, and a durable power of attorney. A general power of attorney grants authority to an agent to conduct transactions on the principal’s behalf (such as banking and real estate), enter into contracts, and exercise the principal’s rights related to stock. A limited power of attorney is transaction specific, meaning the agent only has the right to take action on behalf of the principal in situations specified in the document (such as the sale of real estate or personal property). Finally, there is the durable power of attorney. This final type of POA authorizes an agent to take action prior to and following a disabling event to the principal. The durable power of attorney differs from the general power of attorney in that the authority of a general power of attorney is no longer effective once the agent is deemed incapacitated. Because a durable power of attorney remains effective even after a disability, its popularity has increased over the years.

There have been recently enacted changes to the laws governing Powers of Attorney which went into effect fully on January 1, 2015. The full record of legislation is available at here.

Whether you do not have a Power of Attorney OR you have one which was drafted prior to January 1, 2015, the change to the laws regarding Powers of Attorney in Pennsylvania warrant considering creating or updating this document.

If you have any questions about the information in this article, your estate plan generally, or are interested in getting more specific information regarding the impact of the changes to the laws governing Powers of Attorney cited above, the attorneys at Howland Hess O’Connell are available to help you today. If you haven’t reviewed your estate plan since January 1, 2015, or don’t have one, it is in your best interest to arrange a time with an attorney to consider the options available to you.

If any of the above information applies to you, call for a free consultation at (215)-947-6240 or contact us online to schedule a meeting.


Legal Disclaimer
: The contents of this website are intended solely for informational purposes. They neither constitute nor imply an official legal opinion on behalf of Howland, Hess, Guinan, Torpey, Cassidy and O’Connell nor do they establish an attorney-client relationship of any kind. Howland Hess O’Connell encourages all readers to seek and consult professional counsel before acting upon the information contained on this site.

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Checklist for Preparing to Create a Will or Estate Plan with your Attorney

Meeting with an attorney to discuss your wishes and objectives as it pertains to your estate plans may seem overwhelming. Make no mistake about it, the decisions you will be making in creating a will, trust, or other estate planning document are critically important. However, if you review this checklist below beforehand, you will likely find the meeting and process will go much smoother once you’re actually in the office with your attorney.

  1. Bring All Financial Information: When you meet with your attorney, you’ll need to be able to provide him or her with a full picture of your financial status for planning and tax purposes. You’ll want to bring documentation reflecting any bank accounts, stocks, investments accounts, or bonds in your name or held jointly. You’ll also want to bring documentation showing your liabilities (such as loans, mortgages, credit card statements, etc.). Clients often find it helpful to prepare their own financial worksheet, with one column showing assets and the other debts. Be sure to include account names, numbers and your most current statements. Also specify any life insurance policies or retirement savings information like 401(k)s and IRAs.
  2. Give Your Attorney a Full Family Picture: Think of this as creating a family tree! Be ready to provide your attorney with a detailed breakdown of the makeup of your family. Specifically, these individuals must be considered when creating an estate plan: a spouse, ex-spouse, children, grandchildren and step-children. Be sure to have the ages and names for your family members, and also their address. A key to estate planning is specificity, so the more detailed and less ambiguous you are in drafting the document the better. You should also develop some initial scheme of distribution as it pertains to your family member, even if that scheme is potentially leaving them nothing.
  3. List Your Business Interests: Do you own your own business? Are you part of a partnership, or a member of an LLC? This information is of critical importance in not only planning how to protect and distribute your assets, but also determining the sustainability of your business after your death.
  4. List All Real and Personal Property: We started off by discussing the importance of detailing your financial information. As important, if not more so, is putting together a list of all your real property (land, homes, buildings, etc.) and personal property (everything that’s not land, homes, buildings). Put pen to paper and break your property listing into two groups. The first is for real property: list your primary residence, any vacation or second homes, and any business or rental properties. If you have a timeshare, bring all documentation you have pertaining to that interest as well. Next, list your personal property. You should not feel obligated to list every single knick-knack or trinket, but instead focus on pieces that have either monetary or sentimental value. Examples include family heirlooms, works of art or other collectibles, vehicles, jewelry and even furniture.
  5. Recognize the Vast Power of a Properly Drafted Estate Plan: When we think of estate planning, our attention immediately goes to how we want our money and property to be distributed. But please realize that an artfully drafted estate plan can do far more than just dictate “who gets what”, so to speak. By working hand-in-hand with your attorney, you can do all of the following: (1) make well-informed decisions about appointing a reliable executor, power of attorney, and/or guardian for your minor children; (2) understand and manage the tax implications of your distribution plan; (3) designate whether you want to donate your body to science or donate organs; (4) dictate your funeral arrangements and decide whether you want to be buried or cremated; and (5) allocate a portion of your estate to a charity or church or other not-for-profit entity. These are just a few of the many possible functions of an estate plan to reach below the surface of money and property and give you more control to ensure your wishes are followed!

If you don’t have a will, or you have a will which you drafted which has not been reviewed by a licensed attorney, now is a good time to consider creating or reviewing your document with an attorney. Howland Hess O’Connell has a team of attorneys practicing in the field of Estate Planning available to help you today, including: Richard Torpey, George O’Connell, Michael Cassidy, Thomas Guinan,Bruce Hess, John Howland, Karen Angelucci, Dennis MeakimKaren Mavros and Joseph Winning.

Legal Disclaimer: The contents of this website are intended solely for informational purposes. They neither constitute nor imply an official legal opinion on behalf of Howland, Hess, Guinan, Torpey, Cassidy and O’Connell nor do they establish an attorney-client relationship of any kind. Howland Hess O’Connell encourages all readers to seek and consult professional counsel before acting upon the information contained on this site.

The Importance of Regularly Updating Your Will or Living Trust

It is a common misconception. An individual sets up his or her will or living trust and, following that, believes the job is done. In reality, a will, trust, or other estate-controlling document is as much a living, breathing creature as you are. As your circumstances, relationships, and the laws change, so too must your will reflect those changes. Otherwise, you may have an estate that is being distributed in accordance with your preferences from the 1990s as opposed to 2015.

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There are numerous reasons to review, update, or modify your will or living trust. Perhaps new people have come into (or out of) your life. Perhaps you have joined an organization or charity group and have decided you’d like to leave a percentage of your estate to ensure the continued viability of that association. A good general rule of thumb is that any time you or anyone named in your will experiences a major life change (birth of a child, adoption, death of someone named in a will, children reach the age of 18, separation/divorce, relocation to a new state), it is time to at least consider revising your will or trust to indicate how these changes impact the manner in which you want your property distributed at death.

Perhaps the most important reason to regularly check on the status of your will or living trust is to account for any changes in the law and the effect these changes can have on your estate plan as currently laid out. Estate tax, inheritance tax, and gift tax exclusions continue to move up and down. Being aware of these changes and adjusting accordingly is key to providing maximum protection to your assets and providing for your loved ones.

If it has been longer than three years since you’ve last reviewed your will, it is likely in your best interest to arrange a time with your attorney to review this document. If you don’t have a will, or you have a will which you drafted which has not been reviewed by a licensed attorney, now is a good time to consider creating or reviewing your document with an attorney. Howland Hess O’Connell has several attorneys practicing in the field of Estate Planning and available to help you today, including: Richard Torpey, George O’Connell, Michael Cassidy, Thomas Guinan, Bruce Hess, John Howland, Karen Angelucci, Dennis Meakim, and Karen Mavros.

Legal Disclaimer: The contents of this website are intended solely for informational purposes. They neither constitute nor imply an official legal opinion on behalf of Howland, Hess, Guinan, Torpey, Cassidy and O’Connell nor do they establish an attorney-client relationship of any kind. Howland, Hess and O’Connell encourages all readers to seek and consult professional counsel before acting upon the information contained on this site.

 

Why Have an Estate Plan?

estate_planningThe answer to the question titling this post will be unique for each person and set of circumstances. Still, there are several explanations which apply across-the-board for why having an estate plan is so crucial to protecting your interests and the interests of those closest to you.

Estate planning is not just for people with big houses and fancy cars. A common  misperception is that the term “estate” pertains solely to homes or real estate. Quite the contrary! Many people with detailed estate plans do not own homes at the time of their death, many intentionally so. Your estate is the sum of all your assets: your home, personal property, certain retirement plans, pensions, bank accounts, investments, interest in a business, and even debts owed by others to you are all part of your estate. So, even if you don’t own a 5-bedroom home or 50 acres of land, it is still just as critical to have a plan in place to ensure all your property is distributed in the way you intend.

Against this backdrop, here are five major benefits of creating an estate planning instrument such as a will or trust:

  1. Ensures Your Wishes are Followed: If you die without an estate plan, the state you live in determines how your property is distributed. The state’s distribution may not be consistent with what you would have intended if you distributed it yourself. By having an estate plan, you’re in control of your property even after death and can guide the process of distribution in the way you see fit.
  2. Reduces Taxes on Your Property: After death, both federal and state taxes can potentially cut into the property you’ve accumulated over a lifetime of hard-work and sacrifice. This means less money for those you intend it to go to. Having an updated estate plan drafted by an experienced attorney can shield some of this property from state and federal taxes and allow for your beneficiaries to receive the maximum amount allowed by law.
  3. Protects Your Loved Ones from Unneeded Pain: Following death, many decisions still must be made. Creating an estate plan can reduce some of the emotional suffering by laying out your funeral arrangements and expenses so that your family need not make such decisions during these sad times.
  4. Protects YOU: With a properly executed estate plan, you can make decisions in advance in the event you are later mentally or physically incapacitated. Through instruments like durable power of attorneys and living wills, you can designate what you do and don’t want in the event of incapacitation. You can also designate a person you most trust to make the hard decisions if you are no longer able to make those choices yourself.
  5. Accelerates the Process: Distributing property following one’s death can be a long, drawn-out process. Through alternative instruments at your disposal like living trusts, joint tenancies, life insurance, and pay-on-death contracts, you can speed up the process of getting your property into the hands of your designated recipients.

Howland, Hess, Guinan, Torpey, Cassidy and O’Connell, LLP has several attorneys practicing in the field of Estate Planning, including: Richard Torpey, George O’Connell, Michael Cassidy, Thomas Guinan, Bruce Hess,  John Howland, Karen Angelucci, and Dennis Meakim. For more information on our firm, or to learn about the attorneys and fields of law that will be driving this blog, visit our website to find out more.

Legal Disclaimer: The contents of this website are intended solely for informational purposes. They neither constitute nor imply an official legal opinion on behalf of Howland, Hess, Guinan, Torpey, Cassidy and O’Connell nor do they establish an attorney-client relationship of any kind. Howland, Hess and O’Connell encourage all readers to seek and consult professional counsel before acting upon the information contained on this site.