When some Philadelphia residents hear the word “estate,” they may think about a mansion set in an expanse of green lawn, perhaps surrounded by grazing horses and with an large gate at the end of a winding drive. In reality, the word simply means the collected assets of an individual at the time of his or her passing. Virtually everyone has an estate, even though the contents of each estate will differ. In the same way, virtually everyone can benefit from estate planning, even though the level of complexity of those plans will also differ.
Consider, for example, a couple who have slowly paid off their mortgage over a period of 30 years. They have paid off all of their debt and have managed to set aside a modest amount for retirement. One spouse earned a pension during her career, while the other inherited a small family vacation spot on a nearby river. They live well within their means and are about to begin drawing retirement.
Such a couple may feel that their accumulated wealth bears no resemblance to an “estate,” but they would be incorrect in that assumption. They have actually put together a substantial base of assets, especially considering the increase in value that their real estate holdings likely enjoyed over the years. In order to ensure that their loved ones are able to inherit those assets, an estate plan is required.
Without an estate planning package in place, the assets earned by this Philadelphia couple would be distributed according to Pennsylvania law. That outcome might be very different than either spouse intended, and it could lead to legal wrangling between surviving family members. The only way to make sure that assets pass to the desired parties is to lay out those wishes in a clear and properly drafted estate plan.
Source: washingtonblade.com, “7 myths of estate planning“, Lawrence S. Jacobs, March 18, 2016