Understanding various estate planning terminology
6/23/2016 | Kaplin Stewart Blog
For most Pennsylvania residents, planning an estate is an unfamiliar process, one that is undertaken only a few times in an individual’s life. Each state has a body of laws that guide the estate planning process, and most residents are unfamiliar with those laws and the related terminology. Gaining a clearer understanding of various terms and practices can help individuals reach an estate planning solution that works for their unique set of needs.
One of the most commonly misunderstood aspects of estate planning is the difference between a will and a living will. A will is the legal document that outlines how assets are to be divided in the event of a person’s death. A living will, on the other hand, is a legal document that gives loved ones and health care professionals guidance as to how a person wants his or her medical care to be handled in the event of incapacitation. Both of these documents can be revised as many times as needed, and they should be periodically reviewed to make sure that the provisions within are still in line with one’s wishes.
Another common source of confusion is the difference between a power of attorney and a health care power of attorney. The former is a legal document that authorizes a proxy to handle an individual’s legal and financial matters in the event of incapacitation. A health care power of attorney is more limited in scope and authorizes a proxy to make decisions concerning medical care if the granting party becomes incapacitated.
These are just a few of the basic terms that will arise during the estate planning process. All Pennsylvania residents should make an effort to gain familiarity with the basics of planning an estate. That said, having a professional advisor there to help guide the process is invaluable, which is why most people turn to an estate planning attorney to help them create a comprehensive estate plan that will cover all of their goals.
Source: marketwatch.com, “Clearing Up Common Estate Planning Misconceptions“, Scott Grenier, June 10, 2016