Life can end at any time. Philadelphia residents know that unexpected occurrences like traffic accidents or serious medical conditions can instantly end their lives and change the lives of surviving family members. A sudden death can leave family members grieving, but their pain can be much worse if the deceased failed to plan for their future.
Various estate planning tools can be used by anyone who wants to ensure that his or her affairs are in order when death comes. The main instrument, the will, is an estate planning tool that provides how the person’s property will be distributed after their death. Through a will, a testator lists all properties and assets he or she owns and gives instructions about which property or asset will be given to which heir or beneficiary.
A person can also designate beneficiaries outside the will for certain assets, like 401(k) accounts and life insurance proceeds, which do not go through the probate process. For these assets, the beneficiary named in the plan document or the policy will get the proceeds, regardless of what the will says.
Another estate-planning tool is the power of attorney, which is useful in cases in which a person is incapacitated by a serious health condition and can no longer make decisions for him- or herself. One important use of the POA is to allow the grantor to continue paying for hospital expenses with the assistance of an agent, named in the POA, who has authority to handle the grantor’s finances.
In the event of death, probate and estate administration are likely to follow. Without carefully prepared estate-planning tools, the property and assets of the deceased could end up in state intestacy proceedings, which may result in a distribution inconsistent with the wishes of the deceased.
Source: Idahostatesman.com, “Are you ready for death? Resolve to get your affairs in order,” Tim Engle, Jan. 28, 2014