Estate Planning in an Emergency
How to get started, what to prioritize, and what you will need.
Originally published by the Pennsylvania Bar Association
In order to do Estate Planning properly, can involve a significant investment of time and resources. But at times, that is not always possible. For example, when a loved one is seriously ill or incapacitated. Fortunately, there are options, even if no prior documents exist.
During a January Pennsylvania Bar Institute seminar that was later published in the Pennsylvania Bar Association News, entitled “Drafting a Last-Minute Estate Plan for the Sick or Dying Client”, Partner and Chair of the Estates and Trusts Practice Group Charles Hadad, presented, along with three other attorneys about the possibility of emergency estate plans.
Everyone Needs an Estate Plan
The first thing to consider is that regardless of how many assets you have, Estate Planning is something everyone should consider. In a recent survey from Caring.com, more than 50% of Americans think that advanced planning is important and only 33% of those respondents have actually gone through the steps of building a will or living trust. For most people, this shortfall is because they do not think they have enough assets to protect – but that is far from the case. An Estate Plan allows you to make proactive decisions about how you want your assets divided – rather than leaving it up to the rules of the state.
Prioritize the Essential Documents
It can be tempting to think about every piece of the plan as essential, but in a true emergency, it is important to prioritize documents like a Power of Attorney and a Will. Once an attorney determines that the client has capacity to make these decisions with the help of a medical professional, and has met with them either in person or virtually, it is time to make an assessment. What documents already exist? Only once there is an inventory of all existing documents, an attorney proceeds with a decision on whether documents need to be revised or drafted fresh.
If Possible, Revise Existing Documents
Since time is of the essence, it may be worthwhile to revise and update existing documents rather than starting from scratch. For example, executors or beneficiaries may need to be updated due to evolving relationships or even the beneficiaries’ own passing. This is a simple matter of updating names, rather than drafting the document all over again.
The Next Step is Guardianship
If capacity cannot be met, the next best solution is Guardianship. Guardians do not have full authority over an individual’s assets – they cannot, for example, write provisions for the disposition of property. However, in the state of Pennsylvania, Guardianship can be granted on an emergency basis for a limited time period to authorize some Estate Planning tools.
It is important to note emergency appointments are always temporary – lasting anywhere from a week to a full month in order to solve the critical issues.
Post-Mortem Strategies and Probate
If the worst happens, and a client passes away before finalizing everything, then the questions about ownership become more relevant. It is important to understand what a loved one owned and in what capacity. For example, do they have real estate assets in their own name or are those pieces jointly owned with a spouse? What about retirement accounts or businesses? All of those things must be considered if a will does not exist to clearly spell them out in order to determine whether or not probate is necessary. In the words of Partner Charles Hadad as detailed in the Pennsylvania Bar Association News, “the attorney has to do a lot of fact-finding…to determine whether or not you have to probate”.
Documents Needed to Probate
In order to move forward with Probate, Hadad says that you must have a death certificate. “Early in my career, one of my mentors told me every estate administration is a piece of litigation. It’s just whether it settles smoothly or ends up in adjudication before the court”. Having a death certificate on file will help ensure that everything else moves smoothly.
Inheritances and Asset Beneficiaries
When it comes to a will, the piece that most people will have an interest in is asset distribution and inheritances. It is important to note that without the proper estate planning documents, decisions about asset distribution fall to the state’s rules. For example, if there are living children, and one parent passes, the assets do not automatically move to the surviving parent. Instead, they are divided between the surviving parent and the living children.
Ultimately, the goal of Estate Planning is to make your own decisions about your assets and to whom they will go. Documents like a Will or Power of Attorney, help guarantee that your legacy can be preserved, even after you’re gone. To read more about the topic at hand, check out the original article in the Pennsylvania Bar Association News.