Protecting Your Assets: Essential Estate Planning Strategies for Pennsylvania Residents

Legal Q + A

Mar 4

Written By Graham Settleman

A Step-by-Step Guide to Protecting Your Legacy

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Estate planning is a crucial process that ensures your assets are distributed according to your wishes after your passing. While many fundamental principles apply nationwide, it's essential to be aware of state-specific nuances that can significantly impact your plan. In Pennsylvania, several unique factors should be considered when crafting your estate plan.

Probate Laws

Pennsylvania adheres to a hybrid probate system, meaning that both formal and informal probate proceedings can be used. Formal probate is a more complex process involving court supervision, while informal probate is generally simpler and more streamlined. Understanding the appropriate probate process for your estate is crucial to avoid delays and additional costs.

Intestacy Laws

If you die without a valid will (intestate), Pennsylvania's intestacy laws will determine how your assets are distributed. These laws prioritize your surviving spouse and children, but the specific distribution can vary depending on your family structure and the existence of other heirs. It's essential to have a will to ensure your assets are distributed according to your wishes, rather than relying on default state laws.

Elective Share

Pennsylvania provides a spousal elective share right, which allows a surviving spouse to claim a minimum share of their deceased spouse's estate, regardless of the provisions in the will. This share is typically 50% of the augmented estate, which includes both the probate estate and certain non-probate assets. Understanding the elective share right is crucial for married individuals to ensure their surviving spouse is adequately protected.

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Trusts

Trusts are a valuable estate planning tool in Pennsylvania. They can be used to manage assets, provide for beneficiaries, and minimize estate taxes. Pennsylvania recognizes several types of trusts, including revocable living trusts, irrevocable trusts, and charitable trusts. Each type has distinct characteristics and benefits. Consulting with an estate planning attorney is essential to determine the most suitable trust structure for your needs.

Estate Taxes

Pennsylvania does not have a statewide estate tax. However, the federal estate tax applies to estates exceeding the applicable exemption amount. Understanding the federal estate tax and potential strategies to minimize its impact is important for individuals with substantial estates.

Medicaid Eligibility

Medicaid is a government-funded health insurance program that provides coverage for low-income individuals and families. Estate planning in Pennsylvania must consider Medicaid eligibility requirements, particularly for individuals who may require long-term care. Certain assets and income may be subject to Medicaid look-back periods, which can impact eligibility for benefits.

Conclusion

Navigating the complexities of estate planning in Pennsylvania requires careful consideration of state-specific nuances. By understanding probate laws, intestacy laws, elective share rights, trusts, estate taxes, and Medicaid eligibility, you can create a comprehensive plan that protects your assets and ensures your wishes are carried out. Consulting with an experienced estate planning attorney is highly recommended to provide personalized guidance and tailored solutions.

Information published to or by The Industry Leader will never constitute legal, financial or business advice of any kind, nor should it ever be misconstrued or relied on as such. For individualized support for yourself or your business, we strongly encourage you to seek appropriate counsel.