There are two things true to every life — a beginning and an ending. Departing this life is usually greeted with trepidation. But this is the reality: in all the years of life, beyond the accumulation of rich relationships and experiences, there is often an accumulation of a degree of wealth from funds, to real estate, to personal property.
Despite the universally disturbing notion of life ending, there can be a real satisfaction — and maybe surprisingly some joy — in planning ahead for the disposition of assets and making legally certain they go to those folks who’ve meant the most. Berks County Living spoke with two local attorneys, Vicki Gallen-Schutt of Kreitz|Gallen- Schutt and Latisha Bernard Schuenemann of Barley Snyder, LLP for some insights in planning ahead to protect your assets — and yourself.
BEING PREPARED
“You can never know what’s going to happen,” says Gallen-Schutt, "and you need to be prepared to make those plans for what could happen in the future.” Schuenemann concurs. “I believe more people should start a lot earlier than they do, but we all know that it’s natural that people don’t want to think about (their) death and planning for it,” she says.
The attorneys say there are some common denominators they see when it comes to clients contacting them regarding Wills and estate planning. If there is an “average” age for the bulk of clients, it’s around 55. It’s that point in life when the children have become adults, parents are aging, retirement is a few years away, and the accumulation of wealth/assets may be peaking. There are some other key life points when clients also seek legal advice in estate planning: the birth of children, a critical health scare and the loss of a spouse.
Another time is when parents are planning a first big getaway vacation without children and want reassurance that their wishes are outlined should something untoward occur.
“It depends on the individual, and it is a very broad stroke,” Schuenemann says, “but what I say is that the earlier the better when it comes to planning.”
“I would say no time is too early, particularly as young working adults begin to acquire assets,” says Gallen-Schutt. “That’s the time to create a simple Will so you as an individual are making the decision about where your assets go — your beneficiaries — and who directs that — your executor.”
Early can be as young as 18, the legal age of adulthood.
POWER OF ATTORNEY
A key reason for this centers on power of attorney. Until a child reaches 18, he or she is a minor and is the legal responsibility of the parents. But when that milestone birthday arrives, from a legal perspective, parental rights cease. “When it comes to dealing with medical decisions and financial assets, unless the power of attorney is on record, there can be no legal sharing of these private medical records or financial documents,” says Gallen-Schutt. Power of attorney, while a clear part of estate planning, has its limitations. Primarily, it is a lifetime designation.
By definition, power of attorney is a legal document authorizing a designated individual to represent or to act on another’s behalf on private, business, legal, even medical matters. However, power of attorney ceases at the moment of death.
Both Schuenemann and Gallen-Schutt advocate virtually everyone designate a power of attorney. It can cover custodian issues for minor children and aging parents if incapacitation occurs. For those without legal partners/spouses, it’s especially important to designate a trusted relative, close friend or attorney in the role.
Gallen-Schutt notes that Pennsylvania enacted a health care power of attorney statute in 2006 and revised its durable power of attorney statute in 2015. Also, in 2020, Pennsylvania added new sections to the statutes regarding digital assets. She advises updating any documents executed prior to these dates.
“The medical POA, I believe, is especially important now due to the pandemic,” she says. “Medical facilities frequently request copies of that separate health care POA.”
THE END IS THE BEGINNING
Death is the kick-start of estate disbursement, and the Will delineates beneficiaries as well as the specific designations of funds. When it comes to Will creation, both attorneys stress the need for clients to have a comprehensive understanding of their assets and wishes.
“These are all part of the initial conversation,” says Schuenemann. “Clients should bring current documents along and we will discuss family and relationships, age and health, and begin to review and tabulate assets.”
“Keep in mind that the matter has to go to Orphans’ Court when it comes to guardianship for minors,” she adds. “What is put in the document as who is recommended reflects the decedent’s intent.”
Critical, of course, is naming beneficiaries — and back-ups. For instance, the unexpected death of a spouse or child can leave a legal void. Making sure the Will identifies a secondary beneficiary prevents legal headaches on top of heartache. The same is true with executor assignees.
“I ask the clients who they want to have,” says Gallen-Schutt. “A family member is always a good option, with the spouse primarily, then followed by a child.”
She does not recommend several executors being named. When there are multiple children, say four or more, Gallen-Schutt advises the client to select one or two, perhaps the eldest as an example. And both advise naming back-up executors as a precaution.
KNOWING YOUR STUFF
Disposition of investments and real estate can be less cumbersome than personal property such as cars, jewelry, furnishings, antiques and collectibles. Gallen-Schutt says the state will levy inheritance taxes on all such personal property items specifically identified in a Will. And appraisals will be needed for up-to-date valuations. She advises clients to gift these objects while of clear mind and intent.
“Going around the house and placing pink sticky notes on things isn’t sufficient,” she says.
The disbursement of one’s money, after the usual primary allotments to close family members, can actually continue after death in the form of trusts, foundations and scholarships. Attorneys can help set up the criteria for this sort of gifting and advise how the funds can be both legally created and accessed in the years ahead.
Both Schuenemann and Gallen-Schutt have high praise for the work of the Berks County Community Foundation (BCCF). For nearly three decades now, the BCCF has been distributing grants and scholarships from charitable funds created by local residents. It manages more than 350 charitable funds that were created by local individuals, families and businesses to support causes and organizations they cared about. It also administers scores of scholarships, primarily for Berks County students.
“They can also help guide you through the process, help you create a fund, and designate when and to whom (from individuals to nonprofits) those funds will go,” says Schuenemann.
WHO’S WHO?
In the Commonwealth of Pennsylvania, the result of not having a Will means the disposition of an individual’s estate goes through the probate process in what is called Orphans’ Court. Known as “intestate descent,” a 1980 statute outlines who is legally entitled to a deceased’s assets. The ranking chart starts with surviving spouse, and with each consecutive absence, continues through children and their offspring, parents, siblings or their offspring, grandparents, aunts and uncles or their offspring (cousins), and finally children of cousins. If none of these relatives are found or surface to claim an estate, everything in it goes to the Commonwealth.
Both attorneys believe more and more folks are coming to terms about the reality that life does come to end and are realizing the need to be proactive about what they’ve accumulated. Creating a detailed Will not only disburses assets as outlined, it can also deal with the vexing taxation issues involved.
Indeed, Gallen-Schutt and her partner, Robert R. Kreitz, established Kreitz|Gallen-Schutt in Wyomissing in 2019 as a boutique firm focusing on estate planning, estate administration, trust administration, guardianship and elder law.
“I’ll continue to emphasize the importance for people to plan ahead,” she says. “And for the reader who says, ‘I’m ahead of the curve, and I did my Will years ago,’ I’ll respond that life situations can change.” That may mean updating guardianships, POA and sections of one’s Will.
“You are the one making your decisions of where your assets will go and who you like to be in charge of handling your affairs after you pass away,” says Schuenemann. “Stay on top of things and never be afraid to consult your attorney for updates.”
Barley Snyder, LLP
Kreitz|Gallen-Schutt Attorneys
