What is a Will? A will is a legally executed document which explains how, when and to whom a person would like his or her property to be distributed after death. Under Pennsylvania law, an individual may prepare a will in his or her own handwriting as long as it is dated at the top and signed at the bottom/end of the document. However, such wills (holographic wills) risk ambiguity and incompleteness if they are not reviewed by an attorney. Ambiguity or incompleteness can render a will ineffective or can give a will a different interpretation than the testator (person who "makes" a will) intended. Holographic wills often result in protracted litigation in the probate court system which can cause delays and can be costly. Attorneys generally will ensure that a will is clearly and effectively drafted, typed, and then executed in accordance with the corresponding State law where signing takes place. Furthermore, holographic wills or older wills may not coordinate the other assets you own such as insurance policies, IRAs, pensions, and the taxes on such property. In short, handwritten wills, forms wills and computer or internet generated wills are often not coordinated with the way in which assets are owned, state law, and other important factors. What is a Trust? A Trust involves a legal relationship in which the owner of property (the Grantor or Settlor) transfers such property to a person or institution (the Trustee) to hold and administer for the benefit of a person or institution (the beneficiary). A Trust established under a Will comes into existence after the death of a testator and is known as a Testamentary Trust. A Trust effective during a person's lifetime is referred to as a Living or Inter Vivos Trust. If the Settlor (the creator of the Trust) retains the right to modify the Trust, it is revocable. However, if the Settlor expressly forgoes the right to change the terms of the Trust and retains no interest in the property he or she transferred to the Trust, it is irrevocable. Irrevocable trusts can perform many functions. Accordingly, there are many different types of irrevocable trusts, including but not limited to: ILITs (Irrevocable Life Insurance Trusts); QPRTs (Qualified Personal Residence Trusts, BCTs (Beneficiary Controlled Trusts), and GST Trusts (Generation Skipping Transfer Tax Trusts), and Grantor Retained Annuity Trusts (GRATs). Each of these trusts is designed to accomplish one or more particular things. Each trust type can be varied and customized to your particular needs and estate What is a Financial Power-of-Attorney? A person who gives Power of Attorney to another person (the agent) authorizes that person to act as his or her legal agent. A Power of Attorney may be limited to a certain time and task (e.g., representing an individual at a real estate closing) or it may be a complete and general Power of Attorney which authorizes another individual to act with complete legal authority. A "Durable" Power of Attorney retains its effectiveness even if the person who granted the Power of Attorney becomes incompetent. A Power of Attorney ceases to have effect upon the Grantor's death. Absent a Power of Attorney, if an individual becomes incapacitated, no one may gain access to his or her assets or make other important medical, financial or legal decisions for his or her benefit without going through the expensive, traumatic, and cumbersome process of declaring the person incompetent, and establishing a court appointed Guardianship. Even married couples need powers of attorney to avoid calamity in the event of incapacitation. Why? Most couples believe that since they are married they can act automatically on behalf of one another. But that's just not true. If one spouse becomes incapacitated due to an accident or illness, the non-incapacitated spouse cannot legally refinance the house or sell it (because it is owned in both names), cannot change IRA or 401(k) investments (since they are solely in the name of the incapacitated spouse), and cannot deal with the incapacitated spouse's business interests, life insurance or annuities. The simple process of having a well drafted and thorough Durable Power of Attorney form solves all of these problems. What are Living Wills and Medical Powers of Attorney? A Living Will states an individual's preferences with regard to heroic measures and whether or not they should be taken to preserve his or her life if there is no chance of recovery from a tragic illness or injury. Under Pennsylvania law the right to decline such measures in a Living Will is now explicitly recognized. However, even in Pennsylvania, Living Wills have some limitations. There is, also in addition to the legal effect and moral persuasiveness and clear direction for your spouse, children, or others who might otherwise be conflicted about such matters. Living Wills can be an important part of an estate plan at any age as they remove some of the heavy emotional burden of life and death medical decisions from family members and they sometimes can eliminate the erosion of an individual's estate through avoidance of interminable medical bills. Medical Powers-of-Attorney are used to designate one or more people to step into the patient's shoes to make medical decisions. Typically a Medical Power of Attorney is used in conjunction with a Living Will. What is a Buy-Sell Agreement? When a family or a small group of people owns a business (whether a corporation, partnership, or LLC), the shareholders, partners or members often wish to control who may buy or inherit business interests or stock in such a corporation. The stockholders of a small or "closely held" corporation sometimes agree to certain ownership and transfer guidelines and limitations to Buy-Sell Agreements or Stock Purchase Agreements. Such agreements can be funded by life insurance or can provide, in advance, the rules for purchase of business interests where an owner dies, leaves, or is incapacitated. These agreements often avoid expensive disputes and provide for an orderly and planned succession. They are essential in both family owned businesses and in businesses owned by unrelated parties. Why are these agreements being discussed in the context of your estate planning? Well, in an Enhanced Estate Plan TM these documents must be coordinated with wills, trusts, powers of attorney and related documents to simplify the transition of the business and to protect the other owners as well as the estate for trust beneficiaries.