We have compiled a list of the minimum statutory requirements for the critical estate planning documents.
In addition, our attorneys make recommendations for additional steps to take in executing each document.
Last Will and Testament
What is a Last Will and Testament?
Your Last Will and Testament or “Will” provides your final instructions for caring for your property and your loved ones in the event of your death. It addresses both your personal property, such as the items in your home, cars, boats, etc. as well as your real property, including your house and any additional properties you own. Your Will does not have any effect on accounts that are beneficiary designated to a living person or entity, such as your retirement account, a transfer on death account at a bank, or life insurance.
Your Will should name the person you have chosen to be your Executor. Your Executor is responsible for carrying out the instructions in your Will after you are gone. He or she will not be able to serve until they are formally sworn in by the court.
Minimum Signing Requirements:
To have a valid Will in Pennsylvania, you must sign and date the document. You should not write anything after your signature. Any changes to your Will should be made by executing a new Will.
Recommended Additional Steps:
If you sign your Will in the presence of two witnesses and a notary, the document becomes “self-proving,” which means your Executor will not need further proof of its validity. Naming the person, persons, or entities who will ultimately handle your Estate is just one part of the process.
Including specific language as to how, when and with what authority they will handle the Estate will ensure that your intentions are fully understood and that your chosen Executor(s) has the authority and instructions necessary to carry them out.
Additionally, a well-written Will contemplates issues such as a failed beneficiary designation returning to the estate, unexpected heirs, bond for Executors, Executor compensation, handling business assets, just to name a few.
Memorandum of Tangible Property
What is a Memorandum of Tangible Property?
The Memorandum is an addendum to your Will. This document provides your detailed wishes regarding specific personal property.
Minimum Signing Requirements:
To have a valid Memorandum, this document must be signed and dated.
Financial Power of Attorney
What is a Financial Power of Attorney?
A Financial Power of Attorney gives someone (your agent) the power to act on your behalf and manage your finances in the case that you are unable to make financial decisions on your own, due to hospitalization, infirmity, incapacity, or just a desire to have someone else do so.
Minimum Signing Requirements:
The Pennsylvania Financial Power of Attorney has specific statutory requirements that must be met. These requirements are outlined in 20 Pa. C.S.A. § 5601 and include notice to the principal (the person signing the Power of Attorney) and acknowledgment by the agent. Additionally, the Power of Attorney must be dated and signed by the principal, in the presence of two witnesses and a notary. The notary cannot also be a witness. The financial power of attorney must specifically list whether the agent has certain “hot powers”.
Recommended Additional Steps:
Financial Powers of Attorney are heavily scrutinized by the institutions to which they are presented, such as banks, loan servicers, investment houses, mortgagers, etc. Unless they are properly created and executed, the necessary language may be missing or omitted which would allow your agent to act on your behalf. Form documents often lack the specificity necessary to balance what powers your agent actually needs against the limitations that would be proper given the experience and relationship you have with your agent.
Most Financial Powers of Attorney are immediately effective, meaning that your agent will immediately have access to exercise the powers you have given them. There are many reasons you may want your agent to have immediate authority to act – as the alternative may involve a delay in their abilities which could lead to a frustration of your intent for creating the document in the first place.
A Financial Power of Attorney is a very useful and strictly interpreted document. Great care and precision must be employed to ensure that the powers are broad enough to allow your agent to act while being tailored to your specific needs. We recommend that this document only be prepared by an attorney after reviewing which provisions and powers your specific situation requires so that you can take comfort that your aims will be met.
Healthcare Power of Attorney
What is a Healthcare Power of Attorney?
A Healthcare Power of Attorney, alternatively known as an Advance Medical Directive, Advance Healthcare Directive and/or a Medical Power of Attorney, gives someone (your agent) the power to communicate and enforce your healthcare decisions in the event you are unable to make or communicate effectively on your own.
This document is not effective so long as you can make your own health care decisions and communicate those decisions on your own. The Healthcare Power of Attorney often is combined with the Living Will and the Advance Directive in the Event of Mental Incapacity to make a more comprehensive document.
Minimum Signing Requirements
To have a valid Healthcare Power of Attorney, the principal must be of sound mind when creating and executing the Healthcare Power of Attorney. It must be dated and signed by the principal and contemporaneously witnessed and signed by two witnesses, neither of whom can be health care providers or agents of the health care provider.
Recommended Additional Steps:
Before executing a Healthcare Power of Attorney, it is recommended that the principal explicitly decide whether they wish to make their directives mandatory or allow for their agent to change their directives. While there is no correct answer, a presumption of the former may exist where there is no explicit communication of the latter. Additionally, the more specificity with which healthcare directives are stated, the more likely it is that your directives can be followed without needless and painful interpretation by your agent and the medical team.
Limitations should be explicitly outlined in the Health Care Power of Attorney when desired and religious restrictions, consultations or desires must also be considered. Family history, experiences, and the unique challenges associated with known and unknown illnesses should be examined as the Health Care Power of Attorney contemplates your recovery from these experiences, in contrast to a Living Will which contemplates that you will not recover.
Living Will
What is a Living Will?
A Living Will is a legal document communicating your personal choices about your end-of-life medical decisions.
Minimum Signing Requirements:
“A living will may be in any written form expressing the wishes of a principal regarding the initiation, continuation, withholding or withdrawal of life-sustaining treatment and may include other specific directions, including but not limited to, designation of a health care agent to make health care decisions for the principal if the principal is determined to be incompetent and to have an end-stage medical condition or is permanently unconscious.” 20 Pa. C.S.A. § 5447.
Additionally, the principal must be of sound mind when creating and executing the Living Will. It must be dated and signed by the principal and contemporaneously witnessed and signed by two witnesses, neither of whom can be health care providers or agents of the health care provider.
Recommended Additional Steps:
Your Living Will should be as explicit as possible in stating what life-sustaining treatments you wish to continue if you have no realistic hope of recovery.
There should not be room for interpretation or confusion about your decisions. These commonly include whether the principal wants heart-lung resuscitation (CPR), dialysis, mechanical ventilator, surgery or invasive diagnostic testing, chemotherapy, antibiotics, blood or blood products. Specifically, the Living Will should address both tube feedings and hydration along with whether your comfort should be paramount to all other concerns.
It is also important to note that your Living Will should only be in effect if you have an end-stage medical condition that would result in your death even if you were to engage in all forms of treatment and that your Living Will has no effect if you can communicate your directives on your own.
Revocable “Living” Trust
What is a Revocable Trust?
A Revocable Trust is a trust created during your lifetime which may be revoked or amended during your lifetime subject to the provisions you outline. Revocable Trusts are primarily used to avoid probate or act as a vehicle for specific asset transfer in the event of incapacity or death.
As a result, a Revocable Trust can provide a seamless transition of your assets and protect the confidentiality of your goals. You can set up as many Revocable Trusts as are necessary to achieve your objectives.
Minimum Signing Requirements:
A Revocable Trust must be signed and dated by the person who created the trust.
Recommended Additional Steps:
It is recommended that the trust be signed and witnessed and contemporaneously acknowledged by a notary. Two witnesses, if already present for other documents, may be used along with the notary as well.
Trusts are only as good as the assets which are given to them and creating a Revocable Trust will not eliminate probate or ease the administration of your estate if the trust never has assets titled to it. Most Revocable Trusts are never funded after they are created and upon incapacity or death, no value is received by having created the trust. Additionally, some assets must never be placed in Revocable Trusts such as retirement accounts, certain jointly held assets, and some financial investment vehicles.
The process of aligning assets into a trust generally requires a ‘team effort’ of clients, financial advisors, agents, and banks. It is highly encouraged that a Revocable Trust is thought of as a living document that should be examined and maintained throughout the lifetime of the person or persons who set up the document and that new assets be aligned with the Revocable Trust or titled in contemplation of the Revocable Trust’s existence. In this manner, unintended issues such as unfunded trusts and frustrated intent can be avoided.
Revocable Trusts must also be aligned with other estate planning documents, such as your Financial Power of Attorney, Health Care Power of Attorney and your Last Will and Testament as each document should not be operating independent of each other and should both reference each other and contemplate the acts and abilities that your agent, trustee and Executor will have with respect to you and your property.
The information is not intended to provide legal advice to any specific situation and, as always, we are available to discuss your individual needs.
Pittsburgh Estate Planning Attorneys
Our attorneys are available to assist you in drafting and updating your estate plan and with any questions regarding estate planning. Charles Hadad and Mallory Sikora are members of the Estates & Trusts practice at The Lynch Law Group. Contact them at chadad@lynchlaw-group.com and msikora@lynchlaw-group.com respectively, or by phone at 724-776-8000.
