People often put off thoughts of future planning in the event that something might happen to them. Taking steps to ensure that your assets go where you want them to can make a lot of sense, though, if you want to help secure a financial future for your loved ones.
While more advanced estate planning, such as creating a trust, a business succession plan, or applying wealth preservation techniques, may seem too complicated, having a basic plan in place through a will and other basic documents can form the foundation for later estate management. For residents of Northeastern Pennsylvania, there’s no time like the present to find out how to protect your interests as you plan ahead.
How important is a will?
There are a number of reasons why having a will is important. A will is essentially a legal instrument that records the wishes of its creator, called the testator, regarding:
- The distribution of their estate.
- The care of any minor children.
- The settling of debts and taxes on the estate.
People are usually more motivated to create a will once they understand how it can fulfill their intentions. With a will, they can choose a personal representative (PR) to manage the estate during probate, which will include distributing estate assets to named devisees and closing out the estate.
The testator can also name a guardian for their minor children and plan for the creation of a trust or other estate planning tool that will financially support the children as they grow. Through a will, they can also make provisions directing the transfer of assets to a charity or to minimize estate taxes.
What happens if the estate does not have a will?
If the estate does not have a will, the deceased has passed intestate, and the rules of intestate succession will apply to the distribution of assets as directed by state law. In Pennsylvania, for the surviving spouse this means that:
- If there are no children, the surviving spouse inherits the entire estate unless the decedent’s parents are alive. In this case, the spouse receives the first $30,000 plus half of the remaining estate.
- If there are surviving children belonging to both parents, the first $30,000 plus half the remaining estate.
There are other provisions for a variety of scenarios involving immediate and more distant relatives.
Without a will, any minor children will become wards of the estate unless a relative or friend petitions for guardianship. The estate will still go through probate, but without a named PR, a court-appointed executor will oversee the estate administration, with the costs coming out of estate assets.