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Estate Planning FAQs Part 1
What is a living trust?
A living trust is a legal entity, sometimes referred to as a revocable living trust, created by a person to hold title to his or her property in order to avoid the probate process.
How does a living trust avoid probate?
A living trust allows you to avoid the necessity of the probate process by holding legal title to your property. Since your trust, and not you, holds title to your property at your passing, you do not have an estate subject to the probate process.
What is a health care power of attorney?
A health care power of attorney is a legal document which gives someone else the authority to make medical decision on your behalf upon your incapacity.
What is a durable power of attorney?
A durable power of attorney is a power is a power of attorney which remain effective after the medically declared incapacity of the signer. The authority granted by a health care power of attorney can continue after your death for the limited purpose of facilitating organ donation.
Can you revoke a durable power of attorney?
Yes, a durable power of attorney can be revoked at any time as long as you retain capacity. Generally, signing a new power of attorney revokes the prior version.
What is an advanced directive?
A document which provides your instructions for the end-of-life medical treatment. An advanced directive can both instruct your agent to provide for or withhold life-support technology. An advanced directive is needed to communicate your wishes regarding end-of-life medical treatment when you are unable to speak for yourself and a doctor has declared that you have either a terminal or untreatable condition.
Do my loved ones have to pay inheritance tax upon my death?
Yes, if your state of residency has inheritance tax. Pennsylvania has the following tax schedule:
Spouse and charitable organization 0%
Children and grandchildren 4.5%
Siblings 12%
Everyone else 15%