Under the PA filial responsibility statute, adult children are financially responsible for payment of their parents’ medical care and nursing home costs. This was recently decided in the case of Health Care and Retirement Corporation v. Pittas, a 2012 PA Superior Court case. See 23 Pa.C.S. § 4603.
However, there is a bill currently pending before the PA House Judiciary Committee which is looking to eliminate a child’s responsibility. See House Bill 242 of 2015.
If you create a will, the will is in effect until it is revoked. In Pennsylvania, a will may be revoked in several ways.
First, creating a new will revokes any prior wills.
Second, you may create a document stating that the will is to be revoked. This document must be executed the same way as a will is to be executed.
Third, you may burn, tear, cancel, obliterate or destroy the will, with the intention of revoking the will. You may also have a third party destroy the will in the same manner, as long as it is in your presence and by your express direction. In this case, two competent witnesses must affirm that this is the case.
Every time that you create a will, you revoke all prior wills previously made. However, sometimes you wish to amend the will while keeping the majority of the terms the same. For these situations, it is best to create a codicil.
A codicil is an amendment to a will. The document can add or delete provisions of your mst recent will. You may also make revisions, such as changing the name of an executor or giving a specific bequest to an heir. When you pass away, your codicil is filed with the Last Will and Testament for probate.
However, if the change is significant, I would recommend preparing a new will.
A living will, also called an advanced directive, is a legal document which details your wishes regarding medical treatment when you are in a terminal condition or in a state of permanent unconsciousness, including persistent vegetative state or irreversible coma. A living will gives you the right to determine which treatments, such as cardiac resuscitation and antibiotics, and you choose to accept or decline them.
A living will also gives a you the power to designate a surrogate to make medical decisions on your behalf.
If you create a living will, make sure that you give a copy to your doctors. It is also best to express your wishes to your family members.
When you pass away leaving real property (i.e. house), the property is sold or goes to your heirs, either under a will or through intestacy. Typically, the heirs have the right to do as they wish with the property, such as selling it, keeping it, repairing it, or renting it. Another option is to give someone a life estate.
Under a life estate, that beneficiary has the right to the property for the rest of their life, and then the property reverts to a remainderman. The beneficiary is still responsible for maintaining the property and paying the expenses such as mortgages, taxes, and utilities. While the beneficiary is alive, he can reside in the property or rent it out. He can make improvements on the property or keep it as is. Typically, if he rents it out, the beneficiary gets to keep the rental income. However, when the beneficiary passes away, the property does not go to his or her heirs, rather is goes to the heirs of the original owner.
There are several advantages to a life estate. For example, if you leave a beneficiary a life estate, you know that they will get to stay in the property for their life, and you still get to dictate who gets the property upon his passing. Additionally, there may be a savings on the inheritance tax, depending on who inherits.
One down side is that neither the beneficiary nor the remainderman has the right to sell the property on his own during the beneficiary’ lifetime. The beneficiary cannot sell the property because the remainderman has ownership upon the beneficiary’s passing, and the remainderman cannot sell as the beneficiary has the right to stay during his life. Both parties must agree to sell together.
A power of attorney is a legal document wherein you give another person the right to act on your behalf. It is a very powerful document, in that your agent can act as you. For example, once in effect, the agent may be able to access your bank accounts, pay bills, transfer real estate, make gifts on your behalf, and conduct your business and affairs. While the agent has a fiduciary duty to make sure that he is acting on your behalf, you need to choose an agent (or two) who you strongly trust.
A power of attorney may be in effect immediately, or it may be a springing power of attorney, meaning that it is only in effect when you are incompetent and unable to make decisions on your own. Most powers of attorney are durable instruments, in that they do not terminate upon incapacity.
If you wish to revoke a power of attorney, you must notify your agent in writing. Otherwise, the power of attorney remains in effect until you pass away.
Clients often ask what documents to bring when probating an estate.
First, if there is a will, you need the original signed will. The executor(s) named in the will must be present. If the executor does not wish to handle the estate, then they will need to sign a renunciation which will be presented to the Register of Wills. You will also need to present photo identification (i.e. drivers’ license).
You will also need a death certificate.
Finally, you will need to pay the filing fees, which are based on the size of the estate. You will also need to pay for each short certificate. A short certificate permits you to access the decedent’s accounts. It will list the decedent, date of death, and name of executor/administrator.
Pennsylvania is one of a handful of states that requires a tax paid on inheritances. There is also a federal estate tax, but your estate is exempt as long as your estate is valued at less than $5,430,000. Pennsylvania, on the other hand, has no minimum threshold.
The inheritance tax in Pennsylvania only covers tangible property (i.e. furniture, clothes, collectibles, vehicles) and real estate located in the Commonwealth. Furthermore, there are several exemptions: spouses, parents inheriting from a child who passed away before reaching the age of 21 years, charities, and the government.
The tax rates are as follows:
Spouses: 0%
Children: 4.5%
Parents: 4.5%
Siblings: 12%
Other beneficiaries: 15%
The inheritance tax is due within 9 months from the date of death. However, there is a 5% discount if the tax is paid within 3 months.
In Pennsylvania, executors have a duty to pay all debts prior to distributing assets to the beneficiaries. Normally, creditors may file a lawsuit against a party prior to the expiration of the statute of limitations, which runs for several years (for example, a breach of contract claim has a 4-year statute of limitations). As executors usually wish to finalize the estate and beneficiaries seek their inheritances well in advance, Pennsylvania has provisions to shorten the statute of limitation period for estates.
Once an estate is opened, an executor may advertise the estate in two periodicals. One must be in the legal newspaper in the county where the decedent resided. For example, you must advertise in the Bucks County Law Reporter or Philadelphia Legal Intelligence. Additionally, the other needs to be in a newspaper of general circulation. These advertisements must be published once per week for three weeks. Once this is done, the statute of limitations is shortened to one-year from the last date of advertising.
Many people ask me if a will is necessary for them. They believe that they’re too young, or they don’t have enough assets, or they can’t decide who gets their estate when they pass away. A will is important for anyone. I recommend setting up a will as early as possible. A will is always modifiable as long as you are competent to make changes so it’s not a problem if you change your mind. It is also recommended that you periodically review your wills to make sure that the terms have not changed. You should also modify your will whenever a significant event occurs in your life (i.e. marriage, divorce, birth of a child).
Wills give you the ability to determine your executor (the person handling the estate) as well as trustees and guardians of minors.
Without a will, your estate is divided pursuant to your state’s intestacy statutes. In Pennsylvania, if you have a spouse and children (all of whom are also the children of your spouse), then the spouse keeps the first $30,000 and then gets half of the remainder. If the children are not your spouse’s, then the spouse only gets half, with the children retaining the rest. The law is complex so it is best to consult with an attorney. With a will, you get to choose which beneficiaries will get to inherit, and what their respective shares are. Furthermore, you can give specific bequests, such as vehicles, jewelry, family heirlooms, and specific cash gifts to your heirs.
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