You may have heard the news that the new administration in Washington has plans to abolish the federal estate tax. It is good to remember that there are many reasons for having a Will and Power of Attorney other than the avoidance of taxes:
- Incapacity. This may be the single most important reason to have a power of attorney. By preparing a health care power of attorney, you designate who will make health decisions for you when you cannot. This same person will be able to make end of life decisions for you. In addition, a power of attorney can name someone who will handle your financial affairs when you cannot. Without one, your family may need to go to court to have a guardian appointed for you. That person may not be the individual you would choose and the process is expensive, time consuming and subject to public scrutiny. A power of attorney will prevent a guardianship.
- Avoiding conflict. A properly prepared Will can avoid family disputes. This is particularly important when you wish to distribute your property at death in an unequal fashion.
- Guardians. If you have children under the age of eighteen or an incapacitated child, you must prepare a Will to choose a guardian for these children.
- Managers. Your Will determines who will be in charge following your death. If you don’t write a Will, it will not be your decision as to who will direct the distribution of your property.
Remember that while taxes are an element of an estate plan, the most important reasons to have a well drafted Will and Power of Attorney are non-tax reasons. Don’t delay in getting the proper documents in place.
Stacey chairs the firm’s Estate Planning and Trusts Department and has been in private practice in the Philadelphia area for more than 20 years representing both individuals and institutions. Her practice focuses on estate planning, administration of trusts and estates, charitable giving, and sophisticated wealth preservation and transfer techniques.