Estate planning is a good idea at any age, but it becomes increasingly important as you start a family and career. Fewer than half of American adults have a will prepared, which can lead to unpleasant family disputes in the event of your untimely death.
Here are some tips for estate planning in Pennsylvania:
Why a will is important
Even if you’re single and childless, not having a will can lead to legal and personal headaches for your family should you pass away unexpectedly. What’s worse, if you have a large, extended family or vast assets, the distribution of your estate without a will could be a nightmare due to Pennsylvania’s intestate succession laws.
Intestate succession distributes your assets through a strict, predetermined process. There’s no consideration for relationships, good or bad, with parents, siblings, estranged children, ex-spouses and so forth. Intestate succession could result in your estate being distributed in unfortunate ways.
Compile your assets before starting your will
Once we reach middle age, many of us have accumulated assets in various forms, spread across numerous locations and accounts. You may not even realize the breadth of your estate until you write it all down.
Just a few items that people with even modest lifestyles might have include:
- One or more bank accounts
- Vehicles and boats
- Retirement accounts
- 401k accounts
- Life insurance
- Storage units
- Luxury items (e.g., jewelry, family heirlooms)
- Intellectual property (physical and digital)
- Cryptocurrency wallets
Once you have a comprehensive list of your assets, then you can begin your will.
Estate and inheritance taxes
Pennsylvania has state-level estate and inheritance taxes that apply in certain situations. Assets left to a spouse will not be taxed, but assets left to descendants, siblings and other heirs incur varying taxes.
There are also federal taxes, though these only apply to estates worth more than $12.06 million.
Your long-term care
Your will should have instructions if you are incapacitated or can no longer care for yourself. Hiring caregivers can be incredibly expensive, so make sure your will is clear about these contingencies.
Keep your will updated
You should get into the habit of updating your will after every significant life event, such as the birth of children and grandchildren, buying or selling property, deaths in the family, and substantial inheritances. If your chosen executor becomes unavailable or passes away, you should select a new one immediately.
Have your will reviewed by a professional
Permanent family rifts and protracted legal battles have occurred due to vague phrasing in a will. You can write up a will without legal guidance if you like, but you should at least have a lawyer review it when you are done for errors or unclear instructions.