There are only a few requirements for a will to be valid in terms of its drafting. It must be in writing and signed by the testator at the end. Technically, a notary and/or witnesses are not required, though certainly useful for purposes of probate as well as potential litigation on its validity. The bigger concerns surround the contents of the will. Any aggrieved party can contest the will for a number of reasons. Two of the more common grounds for a will contest include indue influence or lack of capacity. Undue influence covers a variety of situations where the primary allegation is the contents of the will do not reflect the testator’s true intent. This could be because of direct undue influence, i.e. physically forcing the testator to execute a will. It can also be a result of indirect influence. Indirect influence may be asserted if the testator was shown to have persistent confusion or forgetfulness, a party with a close relationship is involved, and the end result is a lopsided will to the substantial benefit of the party with close relationship.

 

Lack of capacity can be asserted wherein it is alleged the testator did not have the mental awareness to execute the document. By law, a testator must be of sound mind to make a will. This has been construed by case law to require they understand who their intended beneficiaries are, what property they have to pass to the beneficiaries, and how they will divide the property among the beneficiaries. There is a presumption of capacity but it can be overcome. To overcome the presumption there must be clear and convincing evidence to demonstrate lack of capacity at the time of signing. Witnesses at the time of signing can offer testimony with regard to the state of the testator at the time with respect to capacity. Consult with an estate attorney if you have concerns about the validity of a will to discuss your options.

It makes sense to revisit your estate plan after any major life change, including new child, marriage and divorce. You want to ensure you are leaving your assets to the individuals you intend to and that can change over time. Sometimes, individuals do not get around to updating their plan leaving their heirs to deal with the fallout. Luckily, in the case of divorce, there is some protection offered by law. Specifically, any provision in a will relating to the testator’s spouse will become ineffective upon divorce unless it is clear the provision was intended to remain post-divorce. The same is true if the testator is in the midst of divorce proceedings and grounds for divorce have been established. Establishment of grounds is by order of the court and requires more than just the filing/service of a divorce complaint.

 

The rule for wills is also applied to beneficiary designations. The law provides that any designation naming a prior spouse shall become ineffective upon divorce. However, a prior spouse would still be entitled to receive their share of the asset if awarded to them pursuant to equitable distribution, where applicable. Your estate plan may also be automatically modified in the event of marriage. If a testator marries after making a will, the surviving spouse shall at least be entitled to what they would have received without a will if they are not named. Intention is also a factor here. If the document notes the upcoming marriage, the law does not apply to change the will.

Disclaimers and renunciations are forms that can impact the administration of an estate. As is true with all legal paperwork, the best policy is to consult with an attorney before signing. If you elect not to consult with an attorney, at least be aware of the purpose of each form. A renunciation is used where an individual who has been named as an executor declines to serve in that capacity. You may name the individual who should serve in your place unless a contingent executor as already been named. In the case of an individual passing without a will, the next of kin would be first in line to serve as administrator of the estate. This individual can also sign a renunciation to waive their right to serve and allow someone else to serve. If there are issues with the person who stands to serve and a refusal to voluntary renounce their position, any other individuals with an interest in the estate can still petition the court to address their concerns.

A disclaimer is used to waive your right to receive an inheritance. Being named as a beneficiary or being an heir at law does not mean that you have to accept what is designated to go to you. It is possible to decline to receive your inheritance. The result of a disclaimer is that you are treated as if you predeceased the decedent. A will or the laws of intestacy would dictate how your share would be distributed among other beneficiaries. A valid disclaimer must be in writing. It must adequately identify the decedent and the asset or amount being disclaimed. It is possible to do a full disclaimer or a partial disclaimer where you only refuse certain assets or a certain amount. The disclaimer has to be served on the person handling the estate, such as the executor or administrator, and/or filed with the court. A disclaimer is irrevocable so be sure of your decision prior to executing the document.

Probate is the process wherein a decedent’s will is presented to the appropriate county office and the named executor is formally sworn in to handle their estate. Probate can also occur if a decedent passes without a will in which case their next of kin can apply to serve as the administrator of their estate. There are a number of steps to take and potential costs involved to complete administration of an estate once formally probated. Depending on the nature of assets and debts of the decedent, probate can sometimes be avoided. It is key to consult with an experienced estate attorney to see if this is possible.

A good estate plan can also eliminate the need for probate. An individual can make plans during their lifetime that may eliminate the need for any probate after their death. For example, they can funnel their assets into non-probate assets which include assets that have a beneficiary designation or payable on death designation. They may also consider titling assets with another individual as joint tenants with rights of survivorship. A trust may be a good fit such that assets are held in trust and not in the name of the individual, with instructions on how the trust should operate following the death of the person creating and funding the trust. Identifying a good estate plan is also very case specific and should be discussed with an experienced attorney as well as a financial planner and/or tax advisor.

Our firm recommends a few different documents as part of a basic estate plan one of which is a Last Will and Testament. This document allows you to provide for what should happen to your probate assets after you pass. Pennsylvania does apply a tax on assets passed through probate or intestacy. The amount of tax depends on the value of the estate as well as the relationship of the beneficiaries to the decedent. Pennsylvania requires that an Inheritance Tax Return is filed with the Department of Revenue within nine (9) months from date of death disclosing all assets that passed through your estate and their values. Debts of the decedent and estate administration expenses can be deducted from total assets prior to determining tax due.

A good estate plan can minimize the tax consequence for your heirs. Presently, gifts can be made in the amount of $15,000 per year without tax assessed. Non-probate assets, i.e. assets with a beneficiary designation such as life insurance policies, are not assessed an inheritance tax. You may consider diversifying your portfolio to hold your assets in a variety of different vehicles. Another option is to place assets in trust during your lifetime. The trust can be drafted such that you can continue to support yourself during your lifetime with the assets held in trust. An irrevocable trust may also prove useful if you have long-term care expenses or need to seek subsidized healthcare. Consult with an experienced attorney to fully understand your options for a suitable estate plan.

Another document to include as part of a basic estate plan is a Power of Attorney. A Power of Attorney allows you to designate an agent to act on your behalf regarding financial matters during your lifetime. A Power of Attorney may be durable or springing. A durable Power of Attorney is effective upon signing meaning your agent can act on your behalf right away without any other prerequisites. In contrast, a springing Power of Attorney does not become effective until the signor has been deemed incapacitated. This is established by verification of two physicians.

An agent is required to act in the best interests of the signor and, to the extent they are aware of any specific desires of the signor, to comply with their desires. Successor agents can be named in the event the primary agent is unwilling or unable to act. Similarly, individuals can be named as co-agents with the requirement they act jointly. Each agent must sign an acknowledgment concerning these fiduciary duties prior to exercising their power. The court can step in and remove an agent where allegations of abuse by an agent are substantiated. The signor can also revoke the power of attorney at any time.

The third document to include as part of your estate plan is a Living Will/Advanced Healthcare Directive. A Living Will allows you to indicate what sort of measures you would like or would not like to the extent the measures would only serve to delay your inevitable death. Specifically, these decisions would come into play if you are in a terminal condition or in a state of permanent unconsciousness, including persistent vegetative state or irreversible coma. If in that situation, you can elect or deny mechanical respiration, cardiac resuscitation, blood products, tube feeding, and dialysis, among other types of treatment.

You can name a surrogate to make medical decisions for you if you are unable to express your own intentions. Your surrogate is limited to the directives in the document. Your surrogate may also have access to your health care records and be able to authorize certain actions on your behalf. For example, to complete insurance forms, sign releases for your health care records, or authorize medication, surgical procedures, or donation of your anatomical parts. Successor surrogates can be named in the event the primary surrogate is unwillingW or unable to act. Similarly, individuals can be named as co-surrogates with the requirement they act jointly. Keep in mind the practical implications of naming individuals that must serve jointly, particularly if they live out-of-state or are estranged from their co-surrogate. Finally, your named surrogate should be someone you trust and you should discuss your intentions with them in advance.

If a loved one has passed away without a will, the laws of intestacy will govern how their estate is handled. The closest kin can apply to the Register of Wills to be designated as the administrator of the estate. Other kin of the same degree may need to renounce their right to serve. The administrator will be granted a certificate of letters of administration as proof of their authority to handle the estate. The administrator then has the responsibility for identifying all the assets and debts as well as beneficiaries and their contact information and maintaining the estate until final distribution. There are certain forms to be filed with the court as well as tax returns and advertisement of the estate.

With respect to final distribution, if the decedent was married and does not have any children or surviving parents, the entire estate goes to their surviving spouse. If there were parents, the first $30,000 goes to the surviving spouse as well as half of the remainder of the estate. If there are children of the marriage, the first $30,000 goes to the surviving spouse as well as half of the remainder of the estate also. If there are children of the decedent only, the surviving spouse gets half of the estate. The remaining half of the estate, or in the event the decedent is not married, the entire estate, shall pass in the following order: (1) to the decedent’s children; (2) to the decedent’s parents; (3) to the decedent’s siblings or their children; (4) to the decedent’s grandparents; (5) to the decedent’s aunts and uncles and their children and grandchildren. If there are multiple persons in a category, they will each receive equal shares such that a decedent with three children would have the estate separated into thirds.

After a loved one has passed, one of the first steps to be taken is to determine if they have a will. If so, you will want to locate the original will and make sure it has been properly signed. Ideally, the will has a self-proving affidavit so that the witnesses to the will do not need to be present when the will goes to probate. If there is not a self-proving affidavit, someone with knowledge of the deceased’s signature would need to verify the signature. In some counties this must be done in person. The named executor will need to go to the Register of Wills with the original will, photo identification, an estimate of the assets of the estate and some method of payment to open the estate.

The Register of Wills will give the executor certificates of letters testamentary. This document authorizes the executor to handle the decedent’s estate. The executor will likely need to appear in person at the appropriate county office throughout the probate process. For this reason, it makes sense to name an executor that lives in the area. You should also be careful if selecting co-executors as they need to agree on how to proceed. The executor should identify all the assets and debts as well as beneficiaries and their contact information. Real property should be secured and maintained, including keeping up with any mortgage, homeowners insurance and taxes in the interim. The executor is also responsible for paying necessary debts, advertising for the estate, filing of necessary tax returns, and final distribution of estate. You should work with an estate attorney to make sure all requirements are met.

Not every asset owned by a party at the time of death will pass under the direction of the will or through the laws of intestacy. It is important to understand the difference in how assets will pass to ensure proper estate planning. Probate assets, those passing through the will, are those for which there is no pre-existing designation as to who should get the asset. Examples of typical assets that will be subject to probate include individually owned bank accounts, cars, personal property, business interest, real property held as tenants in common, cash, and life insurance with no beneficiary. These types of assets should be distinguished from any account with a beneficiary designation, non-probate assets, as those accounts will pass to the beneficiary.

You should also identify which accounts you hold jointly with other individuals. Generally, joint accounts will usually go to the other party whose name is on the account by operation of law.

Assets that are put into joint names within a year of date of death can still be subject to inheritance tax on the full amount of the account though ultimately a non-probate asset. If assets have been put into joint names over a year from date of death then only 50% of the account would be taxed. Ideally, you should plan for how any applicable inheritance taxes on probate assets will be apportioned.