When it comes to estate planning in Pennsylvania, there are a number of things people should keep in mind besides having a will and one or more trusts in place. The creation of new asset categories and the passage of new regulations in recent years have changed the estate planning landscape. It has become necessary for estate planners and people doing their own estate planning to broaden the scope of their knowledge and consider issues that were not so important before.
When crafting estate plans in Pennsylvania, there is much to consider. Frequently, people will concentrate on the basics like wills and trusts. However, some individuals can benefit from a power of attorney. Understanding the responsibilities that the agent will have when granted power of attorney is imperative.
Estate planning can be a difficult concept for many people in Pennsylvania and throughout the country. However, it may be easier to create a plan by breaking the process into different steps. The first step is to consider who the beneficiaries of the plan will be. For the most part, retirement plans allow the owner to designate a beneficiary. The same is generally true for bank, brokerage and other financial accounts.
A common way for Pennsylvania residents to save for retirement is with an individual retirement account (IRA). The potential problem with setting up an IRA is that the account holder could pass away before having the opportunity to take out the money at the appropriate time. One possible solution is designating a trust as the IRA beneficiary.
Many parents expect to give their children or other heirs an inheritance but may be concerned that all the wealth they earned will be squandered by an irresponsible heir. There are several reasons this could happen, including bad financial habits, unhealthy relationships, and addiction issues. For parents in Pennsylvania, there are ways to control the distribution of inheritance so the heirs can get the money they need without the ability to spend it all at once.
No Pennsylvania financial plan is complete if it does not include an estate plan. Estate planning is something many adults tend to avoid because it brings on thoughts of death and leaving loved ones behind. There are a number of misconceptions surrounding estate planning that people lean on to avoid the subject.
It isn't uncommon for Pennsylvania residents to use beneficiary designations for 401(k) or 403(b) assets. Designations can also be used on a variety of other assets, including cars, houses or boats. It is important that these designations are made carefully to avoid negative or unintended estate planning consequences.
Many people in Pennsylvania may find that estate planning can be a stressful process. Estate planning requires that people think about the end of their lives, which can be quite uncomfortable for some. It can also be stressful if the estate owner doesn't understand the tools available to achieve their planning goals.
Pennsylvania residents can use a revocable trust to bolster their estate plans. A revocable trust will continue indefinitely, ensuring the deceased grantor's wishes regarding the handling an estate are honored. If the grantor is also the trustee of the trust, the provisions should address who should be the successor trustees after the grantor dies.
Pennsylvania residents may wonder what's necessary to include as part of an estate plan. While thinking about the future may be a sensitive issue, it can also be an important means to make life easier for loved ones and ensure that a person's wishes are carried out. Many people put off making decisions about estate planning, especially in their younger years. However, even young people can benefit from making an estate plan, especially if they have any kind of assets, are married or have children.