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Estate Planning: Guide to Estate & Long Term Care Planning

Power of Attorneys

Pennsylvania has a new Power of Attorneys law as of April 12, 2000, which requires the person giving it to sign a "notice" form and the agent accepting it to also sign an acceptance form. This new law only applies to Power of Attorneys executed after April 11, 2000. Power of Attorneys executed before that date are acceptable and need not be redone except that powers giving gifting authority should conform to the new law.

Gifting authority is very important for purposes of long term care planning. If a Power of Attorneys does not include clear and complete gifting power, the ability to protect your assets by appropriate planning may not be possible. If your Power of Attorneys only permits "limited gifts" you may not have the ability to protect your assets should you require nursing home care.

     General Durable Power of Attorneys

A Durable Power of Attorneys, whether it is for financial, general or health care matters, remains in effect even if you become mentally incompetent and/or disabled. A General Durable Power of Attorneys grants to your "agent" the right to handle financial and property matters on your behalf. It can be revoked by you at any time. It normally gives broad powers to whomever you designate, including the power to make gifts, if you wish. A properly drafted Power of Attorneys will avoid the necessity of having a "guardian" appointed for you if you become incapacitated.

     Health Care Power of Attorneys

This type of Power of Attorneys specifically delegates authority to your agent to make health care treatment decisions, distinct and separate from financial and property decisions. By giving your agent a written power, your agent can participate in discussions about treatment procedures and help you make health care decisions reflecting your previously expressed wishes.

     Financial Power of Attorneys

This is a Power of Attorneys that delegates to your agent the power to act on your behalf relating to your financial affairs only.


A well drafted Will clearly outlines your intentions and wishes. The peace of mind that comes from knowing that your Will provides that your estate will be administered as you wish, is well worth the cost of Will preparation.

A Will is a written legal document which helps you put your affairs in order at the time of your death. Every adult should have a Will to outline your intentions regarding your assets and other wishes, for example charitable contributions and other gifts, upon your death.

Your Will should identify who will handle your estate, how your assets will be divided and who will serve as guardian if you have minor children. If you already have a Will, it should be reviewed and updated as your life situation changes. A few of these changes are an increase in the value of your assets, the birth or death of a beneficiary, a marriage or divorce, or a change in the estate or tax laws.

In Pennsylvania, a Will is not filed or probated until after a person dies. Therefore, you can change or update your Will throughout your lifetime as circumstances require. The terms of the Will are kept confidential until after you die. If you already have a Will, you can make minor changes by preparing a simple "Codicil", which is a written amendment to your original Will. If you wish to make substantial changes, it is recommended that a new Will be drawn and that you never write on your present Will.

There are varying types of Wills from the very simple to the very complex. The type of Will you need all depends upon the complexity of your life situation and intentions. A Will that is not skillfully and professionally drafted could result in your estate being distributed in a manner contrary to your wishes and lead to unnecessary taxes, fees and other expenses should challenges be raised by disgruntled heirs.


A Trust is a legal arrangement whereby you transfer property to a Trustee to manage and use for the benefit of whomever you choose. There are basically two (2) types of Trusts, namely Testamentary Trusts and Living Trusts. Testamentary Trusts go into effect when you die and are generally contained in your Will. Living Trusts, also known as Revocable Living Trusts, go into effect during your lifetime. While Revocable Living Trusts do not necessarily fit everyone's needs, they can be a useful estate planning tool. You should be aware that Living Trusts are more expensive to draft than normal Wills.

With a Living Trust, a person's assets are transferred into the Trust and held for the benefit of that person during his or her lifetime. Often times the individual making the Trust can act as his or her own Trustee. A Living Trust does not result in any savings of estate or inheritance taxes.

Safe Deposit Boxes

Pennsylvania has a law which specifically addresses the entry into a safe deposit box upon the death of the owner. The law is designed to prevent the contents of the box from escaping the eyes of the inheritance tax authorities. There are a few exceptions, but generally, banks are obligated to seal a decedent's safe deposit box until it is properly inventoried.

The major exception to the general rule deals with boxes that are rented in the names of a husband and wife. With these types of boxes, upon the death of either spouse, the survivor is granted unrestricted access to the box. This exception exists because property owned jointly by spouses is exempt from Pennsylvania Inheritance Tax.

Another exception to the automatic freeze is that a box can be opened to conduct a search for the decedent's Will and deed to a cemetery lot. Upon presentation of a death certificate, most banks will permit the decedent's next of kin to conduct a search. If a box was registered in joint names with someone other than the decedent's spouse, a Will search will usually be permitted by the surviving renter. The Will search must be conducted in the presence of a bank employee. If a Will is found, it is normally released to the person named as Executor.

Since a Will search is permitted readily, keeping your Will in a safe deposit box causes very little problem. Keeping your Will at home with your other valuable papers or leaving it with your attorney are also suitable alternatives. Wherever you choose to keep your Will, you should let your family know where it is located. Any copy should bear a notation indicating the location of the original Will since that is the one that must be probated.

If the box must be inventoried as part of the estate administration, all of the contents are noted on an inventory sheet with a copy given to the Executor and to the Commonwealth of Pennsylvania. Once the inventory is complete, the Executor and/or surviving renter are entitled to receive all of the box's contents.

Advance Directive for Health Care (Living Will)

This is a document that provides your wishes and instructions to your health care providers and family members in the event you become mentally or physically impaired to such a degree that you are unable to effectively make these decisions. An Advance Health Care Directive only becomes operative when it is determined that your condition is terminal with no hope of recovery, or you are in a state of permanent unconsciousness or coma. In this document, you indicate what forms of treatment you will or will not permit and what means, if any, may be implemented to sustain your life.

In addition, this Directive may contain language concerning your wishes regarding the donation of any of your organs in the event of your death. For the document to be honored, the doctor or hospital must be provided with a copy of it. Attorney Wizelman recommends that the family refrain from distributing the Living Will until you are terminally ill AND incapacitated. Most elder care facilities prefer to have such a document on record upon a person's admission.

Long Term Care Insurance

A year's stay in a nursing home can cost anywhere between $90,000 and $110,000. For the average stay of approximately three (3) years, many middle income families could see their life's savings wiped out. Medicare covers only short-term rehabilitative care. Medicaid is available through the State for those who spend down all of their assets and become impoverished.

Long term care is the kind of help you need if you are unable to care for yourself because of a prolonged illness or disability. It can range from help with daily activities at home, such as bathing and dressing, to skilled nursing care in a nursing home. It can also include care in an assisted care facility.

Long term care (LTC) insurance is an insurance policy which will provide coverage for at least twelve (12) consecutive months in a setting other than a hospital, together with maintenance and personal care. LTC insurance can help provide a financial solution to the potentially devastating costs of long term care due to illness or other conditions.

LTC insurance may not be desirable for everyone. You must carefully consider the cost of the coverage in relation to your own goals and objectives. If, however, you (1) have built a nest egg which you wish to leave to your family; (2) are concerned about the financial burden on the at-home spouse; (3) want to maintain your financial independence; or (4) want the assurance of being able to afford quality nursing home care if it becomes necessary, then LTC insurance may be the answer for you.

LTC insurance is bought for a certain daily rate, for example $200 per day. This rate may be fixed or adjusted for inflation. At-home health care coverage is optional, but will increase the cost. Home care coverage sounds desirable, but experts say that as a practical matter, it rarely extends much beyond six (6) months. So, you should weigh the additional costs very carefully. Obviously, all of these options can vary the costs considerably.

If you are interested in this type of insurance, it would make sense to use the services of someone who specializes in long term care insurance. Attorney Wizelman can assist you with locating individuals who are experts in long term care insurance sales.