Estate Planning

What comes to mind when you hear the term "estate planning?" 

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If you're like many people, you know it has something to do with having a Will.  You’d also be correct if you said it involves making certain other types of arrangements affecting what happens once your life has ended.

A good estate plan goes further and addresses many aspects of your current situation, as well as how to thrive in the years to come.  Consider this definition:

Caring for yourself and your assets while you are living, and providing for the transfer of assets to other persons and entities – both during your life and afterwards.

Why do estate planning?

Very few people wake up in the morning and wish they could spend the day working with their attorney to create an ‘estate plan.’  However creating (or updating) a plan is among the most important things you can do.  When you do so, you can:

  • ensure the property you have accumulated over your lifetime goes exactly where you want it to go and when.  If you don’t have a will or living trust, the state has a distribution plan for you which may or may not be in accordance with your wishes.
  • give directions to be followed in case you become incapacitated and can’t make decisions for yourself
  • organize your affairs and designate who will handle them when you are gone
  • appoint a guardian for any minor children
  • provide for any special needs your loved ones may have
  • minimize possible estate taxes and costs
  • specify the type of funeral arrangements you would like
  • remember and provide for friends, pets, and organizations you care about but are never a part of the default state distribution scheme

By planning, you also make things easier for your family. If something happens to you, it will be a very difficult time for your family members and other loved ones. How wonderful it would be if they knew exactly what you wanted to have happen and have the means at hand to follow your wishes. Consider the planning you do now to be your final future gift to your loved ones.

While estate planning can mean confronting same uncomfortable issues, it provides an opportunity to focus on your values and talk with your family about your plans.

The Key Elements of an Estate Plan

Related to your final wishes

  • Will.  A valid Will is generally typed, dated, and signed by you as well as two legally competent witnesses. States differ as to whether a handwritten Will, with or without witnesses, is valid.
  • Revocable Living Trust.  This replaces the Will as the main document disposing of your property.  You might hear it referred to as a “living trust” or “RLT.”  The trust is created while you are living, most often people serve as their own trustee, and the power to change and even revoke it can be retained.  A living trust requires that you actually transfer your property into it for it to be effective.

There are certain reasons for going with one approach rather than the other and an estate planning attorney can advise you as to which is best for your situation.

  • Beneficiary Designations. These are the forms you fill out when you open a bank or stock brokerage account, establish an IRA or other type of retirement plan, purchase a commercial annuity or life insurance policy. The beneficiary form allows you to decide who will receive whatever remains upon your passing (or the death benefit in the case of life insurance). These decisions can have an important impact on how your overall estate is distributed and should be part of any coordinated plan.

Learn how to Prepare To Meet with Your Attorney

  • Power of Attorney (POA) for financial matters. This document grants the ability to act on your behalf for a variety of potential transactions and the responsibilities to someone you trust. The extent of the authority granted can be tailored to your particular desires.
  • Power of Attorney (POA) for health care decisions. This document appoints someone to make decisions for you regarding medical treatment if you are not able to do so. It allows you to specify who is in charge of making critical treatment decisions and, perhaps more importantly, who does not have that authority.
  • Health Directive. Sometimes referred to as an “advance directive” or “living will” (not to be confused with a living trust), this specifies the type of end-of-life treatment you want to receive.  It is a directive to the physicians treating you and for the person holding your Health Care Power of Attorney.
  • Physician’s Order for Life Sustaining Treatment (POLST). This allows you working with your doctor to document your wishes regarding resuscitation and other life sustaining procedures.

Managing and Distributing Your Wealth

We realize that we will never replace family members and other loved ones in your plans, and we wouldn’t want to. Part of your planning process is to consider how much to leave to individual heirs; what remains can be used to fulfill your charitable dreams and wishes. We hope that you will consider arranging a gift to Bryn Mawr when you set up (or update) your estate plan. 

How much to leave to children and grandchildren is a judgment call.  Some parents transfer as much of their estates as possible to heirs.  Others fear that transferring too much wealth may discourage productivity and undermine self-esteem.  A memorable line from the movie The Descendants encapsulates this debate nicely: “…you [want to] give your children enough money to do something but not enough to do nothing.”  Still others realize that the community and world they leave to their children and grandchildren is also part of their legacy.

If you would like to support Bryn Mawr through your Will or living trust, here is sample bequest wording you can share with your attorney.  Or consider a gift by beneficiary designation (aka “bequest substitutes”); it has many of the same advantages while being amongst the most tax-wise ways to give.

The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results.