3 keys to a great estate plan

EP2As an elder law attorney, I see hundreds of estate plans every year. Most are adequate – they cover the minimum requirements and are not so outdated that they no longer make sense.

You could easily do that too. For $10, you could buy some basic forms at a legal stationery store, fill them out to the best of your ability, and have them witnessed and notarized. Presto! You have an adequate plan that may work well most of the time. Unless something unexpected happens.

Or, with a little more investment of time and money, you could have a great estate plan – one that provides protection for you and your assets during your lifetime (especially if something bad happens to you), security for your spouse and family, and protection of beneficiaries after you’re gone.

Here are my three keys to having a great estate plan.

Cover all the bases

In the noir classic film Body Heat¸ actor William Hurt talks to Mickey Rourke (playing a convict) about how to commit a murder. “There are about 50 things that can go wrong,” Rourke tells him. “If you think of 25, you’re a genius.”

Estate planning can be like that too.

To have a great estate plan, you should sit down with an experienced estate planning attorney and go over everything that could arise in the coming years – the 25 issues you can think of, and the other 25 that never would have occurred to you. Here are just a few:

  • What happens if you or your spouse die unexpectedly? Do you realize all the ramifications?
  • Does your estate plan minimize income taxes and capital gains taxes, and if so, how?
  • What happens if you become incapacitated – does your power of attorney not only appoint someone to act for you, but also prescribe the precise powers they will need to provide for someone in your exact circumstances (taking into consideration the 2014 changes to Pennsylvania’s POA statute)?
  • If one of your children dies before you do, how does your estate plan address that contingency?

A great estate plan covers all the bases and provides for as many of the unexpected hazards of life as possible.

Here is where working with an estate planning attorney pays off. You benefit from the experience gained from seeing thousands of estate plans go well and go wrong. We know what to look for.

Provide for asset protection

When it comes to asset protection, garden variety estate plans just don’t cut it. I can’t tell you the number of times a client has come to me in a crisis (nursing home admission, death of a family member, sudden incapacity) and poorly drafted (or non-existent) estate planning documents actually prevent the client from protecting assets.

For example, we could save the family hundreds of thousands of dollars by transferring funds to a spouse or disabled family member, and thereby qualifying for Medicaid benefits, but the power of attorney prohibits the transfer.

A great estate plan foresees the ways someone with your assets, in your circumstances, might stand to lose the assets that provide security for you and your family. It then gives you the tools you need to weather a crisis.

For this reason, a great estate plan is surprisingly cost-effective.

Protect beneficiaries after you’re gone

A will most people consider “adequate” divides assets among the person’s beneficiaries after the person’s death.

Here is a short list of problems I have seen with poorly considered distribution plans:

  • A $350,000 distribution going to a low-interest sequestered account for a minor, and then handed over to the beneficiary at the age of 18. (Wouldn’t it have been better to have the funds invested and managed by a responsible trustee, and used for support and education until the beneficiary reaches age 25 or 30?)
  • A $110,000 bequest to a disabled grandchild made the beneficiary ineligible for her federal disability benefits and Medicaid health care coverage. Court intervention was needed to place the bequest into a special needs trust. However, if any funds are left when the beneficiary dies, they must be used to repay the state for lifetime benefits. With better planning, any remaining funds could have benefitted other family members.
  • An inherited IRA worth roughly $300,000 lost to creditors when the beneficiary went into bankruptcy. (See the 2014 U.S. Supreme Court case, Clark v. Rameker.) A trust would have provided protection that the Bankruptcy Code does not.

A great estate plan not only divides your assets, it protects them for your beneficiaries in case of divorce, disability, financial problems, and any number of other potential hazards.

Learn more

At our estate planning workshops, you can learn more about the latest techniques for having a great estate plan. See our Events Calendar for dates and times, and call (412) 531-7123 to register.

How are people related? Understanding consanguinity

Test your knowledge with this question: What relation to you is the child of your cousin?

  1. Nephew
  2. Cousin
  3. Second cousin
  4. First cousin once removed

The question raises an issue of “consanguinity” – the relatedness of family members. As an estate planning and elder law attorney, I constantly need to know how to refer to relations based on blood and marriage.

I rely on a consanguinity chart to help me with the trickier questions of relatedness. You can find an example here. A chart visualizes the relations and makes it easy to find the correct term.

As to the quiz question above, most people pick C, second cousin. But the correct answer is D, first cousin once removed.

Your first cousin is the child of your aunt or uncle, and also the grandchild of your grandparents. Your second cousin is the grandchild of your great-aunt or great-uncle, and also the great-grandchild of your great-grandparents.

But the child of your cousin is your first cousin once removed. What makes the title “first cousin once removed” so confusing to me is that it is also the title of your second cousin’s father or mother. It turns out, though, that each type of “first cousin once removed” shares the same percentage of your DNA, as you can see from this chart.

See why I use a consanguinity chart? If you do too, you’ll keep even distant relations straight.

Does the client have capacity? (Practice tip)

Here is some advice to lawyers who, at least at times, prepare wills or other estate planning documents for clients. It’s about having an easy but effective checklist for establishing client capacity.

You know you need to establish that a client has mental capacity. But do you know, off the top of your head, all the elements of testamentary capacity in your jurisdiction? If someone ever subpoenaed your file, say in a subsequent will contest, would you be able to show that your file documents your determination that the client had capacity at the time of document execution?

Here is an easy system to make sure you can establish client capacity every time.

First, research the statutes and case law in your state about what constitutes capacity. In Pennsylvania, where I practice, the statute on the requirements for a valid will simply requires a testator to be “of sound mind.” The case law expands on the meaning of that simple phrase.

Here is an excerpt from a case that nicely summarizes Pennsylvania law on this point:

The following factors must be considered to determine if a testator had testamentary capacity:

  1. Knowledge regarding the natural objects of his bounty. This frequently will be knowledge of relatives where some or all are to be beneficiaries. Understanding who the persons are who are to share in the estate will normally satisfy this consideration.  
  2. Knowledge of property and of what the estate consists. However, testator need not know every asset. Where testator intends to give all of his property to one person, his knowledge of his property is of little bearing.  
  3. Understanding what testator desires to do with the property in the estate.

The case is In re: Estate of Ballas, a lower court opinion with the citation: 2010 Pa. Dist. & Cnty. Dec. LEXIS 552, *26-28. (I have supplied the underlining and omitted citations from the text.)

The same case nicely summarizes other relevant points about capacity:

Testamentary capacity need not rise to the same level required to conduct business affairs. Testator may have capacity although old, weak and sick. Physical weakness will not create incapacity as long as sufficient mental capacity exists. A faulty memory alone is not sufficient proof of incapacity.

It is recognized that a testator is entitled to his own prejudices. Eccentricity is not equivalent to incapacity. Lucid periods are recognized by the courts.

(Again, citations are omitted.)

Keep your short list of requirements handy to go through with clients, especially those whose capacity could be questioned later on. Document the answers.

If you believe the client has sufficient knowledge to establish capacity, your documented responses will put you and your client in good stead against any future scrutiny.

If the client has insufficient knowledge, or you have doubts about capacity, you may need to seek a professional opinion from a doctor or psychologist before proceeding further. If the client lacks capacity, of course, decline the engagement.


Questions asked and answered from our last workshop!


  1. I have elderly parents with modest assets. Is it possible to protect any of those assets?
  2. What is the financial impact of parents moving into my home for care? Do I have liability as their Power of Attorney? Is it possible to use Veterans Benefits for their care in my home?
  3. What is the criteria for a disabled child (exempt transfer)? Can I transfer assets to a disabled child without a Medicaid eligibility penalty?
  4. My mom is 87 years old and she is $600 short each month after paying for care. Should I sell her house?
  5. Can I do IRA planning to minimize taxes and maximize benefits to my heirs?
  6. What are the tax consequences of transferring $50,000 as a gift in a single year?

Join us at our next workshop and have your questions answered! Click here to see upcoming dates.

Questions asked & answered at yesterday’s “Estate Planning Essentials” workshop


  1. Can I protect assets for my heirs?
  2. How can I avoid court and family disputes?
  3. How can I set up a trust?
  4. Is it true that “probate” costs a lot? Should I avoid probate?
  5. If I have no children or trustworthy people in my life, who can I appoint as my agent or executor?
  6. What is Medicaid Planning?

Join us at our next workshop and have your questions answered! Click here to see upcoming dates.