At our estate planning workshops, we often hear common questions, and today, I’d like to address some of the most frequent ones.
Our workshops are designed to offer free, valuable education across the Pittsburgh area because we believe that informed decisions lead to better outcomes. We want to ensure that people have the knowledge they need to create the right plan for their families.
1. “Which is Better, a Will or a Trust?”
A common question is whether a will or trust is the better option. The truth is, there’s no “one-size-fits-all” answer. Both are tools with distinct purposes, and understanding how each one works can help you determine which is right for you. While we can’t predict the future, a well-thought-out estate plan can adapt to many scenarios, covering unexpected circumstances like changes in wealth, family structure, or health.
Think of an estate plan as your personal rulebook. You decide how your assets should be handled, who will be in charge, and how your legacy will be managed. Without an estate plan, Pennsylvania’s default rules apply, which may not reflect your wishes, especially regarding long-term care.
2. The Role of a Power of Attorney (POA)
A POA document allows someone you trust to make decisions on your behalf if you’re unable. There are two main types: durable and springing. A durable POA takes effect immediately and remains in force if you lose capacity, making it easier for your loved ones to assist you as needed. A springing POA, however, only becomes active once incapacity is legally determined, which can cause delays if medical cooperation is difficult to obtain.
When reviewing your POA, check for “unlimited gifting” authority. This provision can be crucial for protecting assets in crisis situations, such as Medicaid planning when nursing home care becomes necessary.
3. Understanding Wills and Probate
Wills are the most commonly known estate planning tool. They specify who inherits your assets when you pass away, but wills also come with limitations. For instance, assets passing through a will must go through probate, a public, potentially costly court process that can delay your family’s access to funds.
While probate has downsides, it also opens up your estate to estate recovery claims, especially in cases where Medicaid has covered long-term care costs. Using a will alone can mean your home or other assets may need to be sold to pay back these expenses.
4. Avoiding Probate with a Trust
A common way to bypass probate is through a Revocable Living Trust. This trust allows you to transfer assets during your lifetime, retaining control as the trustee and naming beneficiaries. It is the beneficiaries who will receive the assets upon your death. A revocable trust helps keep the process private and streamlines asset transfer without court involvement.
For those particularly concerned about asset protection, an Irrevocable Asset Protection Trust may be ideal. Although you give up some access, this type of trust can shield assets from nursing home expenses after five years. The trust holds your assets for beneficiaries, such as your children, while keeping them out of reach of potential claims.
A Holistic Approach to Estate Planning
At Sechler Law Firm, we believe that estate planning isn’t about choosing between a will, a trust, or a power of attorney. Estate planning is about creating a comprehensive toolbox for life’s unpredictability. Our goal is to equip you with all the necessary tools to prepare you for any scenario, not just a select few. Rather than treat clients as one-time transactions, we provide ongoing support through The Red Wagon Club. This program helps you keep your plan updated as life changes and provides so many other benefits. Please refer to one of our previous blogs about the Red Wagon Club.
Ultimately, estate planning should offer peace of mind and ensure your loved ones are cared for. We’re here to help you create an adaptable, resilient plan that reflects your values and goals. For more information on our workshops or services, contact us at 724-841-1393.
