Understanding Testamentary Capacity in Drafting a Will

 

For a will to be considered valid in Pennsylvania, the person who creates it (testator) must be of sound mind and judgment. A common reason for contesting a will is lack of testamentary capacity. Someone who is contesting a will for this reason must prove that the testator (person who created or changed a will) lacked the mental competence to do so.  Probate litigation attorneys often handle cases involving testamentary capacity. Regardless of whether you are creating your own will or you are thinking of contesting a loved one’s will, a lawyer can help you understand the concept and how it may apply in your specific circumstances.

What is Considered “Sound Mind” in Pennsylvania?

Just because someone is elderly, eccentric, physically weak, suffering from an illness or has a poor memory, it does not mean that they lack testamentary capacity. Some common conditions that may result in testamentary incapacity include:

• Dementia
• Delusions
• Alzheimer’s disease
• Other mental disorders that affect a person’s ability to understand their actions

One Pennsylvania court summarized having testamentary capacity as: “At the time of execution of the will the testator had an intelligent knowledge regarding the natural objects of his bounty, of the property he possesses and of what he desires to do with his estate.”

To put it simply, a person is considered mentally competent to draft and execute a will if:

• The testator understands that the document they are drafting and signing is a will
• The testator understand the nature and situation of the property referred to in the will
• The testator remembers and understands the beneficiaries named in the will

When a testator intends to give all of their property to one person, their knowledge of property has little bearing. Testamentary capacity in creating a will does not rise to the same level required to sign a contract or conduct business. An estate planning attorney would not encourage someone who obviously lacks testamentary capacity to create a will.

Challenging a Will Due to Lack of Testamentary Capacity

If you believe a loved one was mentally incompetent when they drafted their will, you can contest the will in the Orphans Court. You must present evidence showing that their lack of testamentary capacity affected the creation of the will and/or distribution of assets. Some common evidence used in these types of cases includes medical records, witness testimony and testimony from health care providers. If you successfully prove testamentary incapacity, the court will likely invalidate the will and the estate may be distributed according to the laws of intestate succession. These types of cases are complex, so it is critical to seek the counsel of experienced lawyers who handle wills who can evaluate your case and advise on the best course of action.

If you need help with estate planning or are considering contesting a loved one’s will, finding a good probate lawyer in Chester County, PA, can help to ensure your rights and interests are protected.

This blog was originally posted at  https://carosella.com/understanding-testamentary-capacity-in-drafting-a-will/

Estate Planning Terminology You Should Know

Estate planning includes a lot of terminology you may not know if you are unfamiliar with this area of the law. Although estate lawyers can guide you through the process of drafting a will and other important documents, knowing the definitions of these terms can help you explain things to your family members and allow you get a better understanding of the purpose of certain estate planning tools.

Administrator—When someone dies without a will in Pennsylvania, the Probate court appoints someone as an administrator to oversee the distribution and settlement of the estate.

Advance Medical Directive—A document that names an agent responsible for making medical and end-of-life decisions for another person.

Agent—Sometimes called an attorney-in-fact, an agent is a person you designate to represent you in a Power of Attorney. Typically, your agent handles your finances, health care decisions and other manners in the event that you become incapacitated or unable to manage your affairs.

Beneficiary—A person who is named to receive proceeds from a life insurance policy, retirement account, trust or will.

Conservator—When an individual becomes incapacitated or unable to handle their affairs, a court may appoint a conservator, which is similar to the role of a guardian.

Decedent—In the legal world, this term is used to refer to a deceased person.

Estate/Inheritance Taxes—State and federal taxes that are paid on a decedent’s estate.

Executor—Someone who is named to carry out the instructions outlined in a will.

Fiduciary—An institution or individual who has a legal or ethical obligation to act in the best interest of another. In estate planning, a fiduciary may be the executor of a will, personal representative appointed by the court, a trustee or an agent named in a power of attorney. In some cases, probate and estate lawyers act as fiduciaries for their clients.

Grantor—An individual or entity that creates a trust. They may also be called a trustor or settlor.

Guardian—A person who is designated to handle decisions on behalf of a minor child or someone who is incapacitated.

Joint Tenancy—Property owned by two or more people.

Irrevocable Trust—A trust that cannot be altered or changed once it is established by a trustor.

Last Will and Testament—A legal document that lays out a person’s wishes for how their assets are to be distributed to their beneficiaries.

Living Trust—A revocable trust that includes assets placed in the trust during the grantor’s lifetime.

Power of Attorney—A document that allows someone to name an agent who will act on their behalf should they become incapacitated. A Durable Power of Attorney for Health Care enables an agent to make medical decisions. A Durable Power of Attorney for Finances allows an agent to manage an incapacitated person’s financial affairs.

Probate—The legal process for validating a decedent’s will, distributing their estate to beneficiaries and heirs and settling their debts.

Revocable trust—a trust in which a living grantor can add or remove assets, change instructions , or terminate the trust. Wills and trusts attorneys can help you understand the different types of trusts and the benefits they may provide for you and your family.

Testator—A person who creates a will.

Trustee—An institution or person who manages and distributes assets in a trust.

If you need help creating an estate plan, the experienced team at Carosella & Associates can help.

This blog was originally posted https://carosella.com/estate-planning-terminology-you-should-know/

Revocable Trust vs Irrevocable Trust- What's the Difference?

A trust is an arrangement that enables one party (a trustor) to allow another party (a trustee) to hold assets for the benefit of a third party, the beneficiary. Lawyers who deal with wills and trusts often advise clients to use trusts as a way to allow assets to avoid probate, lessen tax burdens for beneficiaries or take care of loved ones with special needs. Different types of trusts are used for different purposes—it is important to understand each type and their benefits and drawbacks.

Revocable Trusts

A revocable trust allows the trustor to take assets in and out of the trust, change its terms and beneficiaries or terminate it at any time. When a trustor dies, the property in the trust is distributed to beneficiaries according to the terms of the trust agreement. The major advantage of a revocable trust is that the trustor has the flexibility to modify or terminate the trust while they are alive. A revocable trust can also ensure that your assets remain available to be used for your benefit should you become incapacitated or unable to manage your affairs.

Typically, the assets in a revocable trust do not have to pass through probate, but are subject to creditors and estate and inheritance taxes. Probate is the legal process required to validate a will and distribute an estate. It can be a costly and time-consuming process. Having the majority of your assets in a revocable trust can help your loved ones save the cost and hassle of dealing with probate. Having an attorney explain the probate process and going over the pros and cons of irrevocable trusts can help you make informed decisions that can benefit you and your loved ones.

Irrevocable Trusts

Except in very rare circumstances, the terms of an irrevocable trust cannot be changed once it is set up. The trustor is no longer the owner of the assets placed in the trust–they cannot take them out, modify the terms of the trust, or terminate it. Property, securities and other assets placed into the trust during the trustor’s lifetime must be registered in the name of the trust. Although irrevocable trusts do not provide as much flexibility as revocable trusts do, they sometimes offer more tax savings. Because the trustor no longer has ownership of the property in the trust, these assets, in many cases, are not subject to income taxes or estate/inheritance taxes.

With this type of trust, assets are more protected from creditors and taxes unless fraud is involved. For estate planning purposes, an irrevocable trust may be set up to hold monies for funeral costs or special types of life insurance payouts as well.

Which Type of Trust is Right for You?

There is no one-size-fits-all solution in estate planning. Revocable and irrevocable trusts can be powerful tools that can protect your interests when used correctly. An estate planning attorney can assess your circumstances, talk with you about your wishes and goals and devise a plan that works for you and your family.

This blog was originally posted at https://carosella.com/revocable-trust-vs-irrevocable-trust-whats-the-difference/