Here’s the question: Do I need to hire an attorney to prepare my will? Under Pennsylvania law, the answer is clearly no. Personally drafted wills and estate planning documents are valid as long as they conform to statutory requirements. However, for many individuals, investing in legal advice and professionally prepared documents will help avoid trouble down the road and can even result in net after-tax savings. Here are some questions I ask potential clients in order to determine whether engaging legal counsel is in their best interest:
1. Do you have minor children?
To me this is the most important question. Choosing substitute legal guardians and making financial provisions for the care of your minor children is extremely important and an attorney can ensure that your children will be cared for and your wishes will be followed.
2. How much money do you have?
When I say money, I really mean “assets,” a legal term which covers everything you own (cash, stocks, cars, your house, jewelry, that silver set Grandma gave you as a wedding present, etc.). Add that all up, subtract your liabilities, and you have the value of your estate. As the value of your estate increases, the potential tax and administrative savings associated with smart planning increases. Based on general rules of thumb: (1) if your estate is less than $300,000, you may not need assistance depending on the other factors (e.g. kids); (2) if you have more than $300,000, I suggest you seek legal assistance; (3) if you have more than $500,000, I would strongly advise you to confer with an estate planning attorney; and (4) anything beyond $1,000,000 is a definite.
3. Do you plan on leaving money to charity?
If you plan on leaving a portion of your estate to charity, consult with a skilled tax attorney because he or she can advise you on strategies that will maximize the financial and tax benefits associated with charitable giving. For example, by using certain tools you can benefit a charity and your individual heirs at the same time.
4. Are there any potential “family issues?”
The last thing you want is for your spouse, kids, relatives, or other beneficiaries to fight over your estate. I have seen it, and trust me on this, nobody wins. If the following red flag scenarios are present, you should work with a lawyer to draft an air-tight estate plan that will help prevent future conflicts: (1) you are leaving money unequally to and/or cutting out one of your heirs (e.g. children); (2) you are leaving money to someone that the rest of your family does not get along with (the “black sheep” scenario); (3) you have children from a previous marriage; (3) you are separated but not divorced; (4) you want to dispose of your money in a unique fashion (gifts to charities, unrelated individuals, etc.).
5. Are you leaving money to someone who has special needs, is going through a divorce, has drug or alcohol issues, or is unable to manage their finances?
If you plan on leaving money to someone who is dealing with unique personal circumstances, it would benefit you to talk with an attorney. Setting up trusts and other estate planning vehicles can ensure that your money will directly benefit the person without being wasted.
6. Do you plan on leaving specific assets to specific people?
This question raises drafting and tax issues. As an example, if you plan on leaving a piece of real estate to your spouse, an IRA to your child, your most valuable antique to your sibling, and your boat to your best friend Dave, a tightly drafted Will can ensure that your property passes in the manner you desire and an attorney can help.
Moreover, an attorney can advise you on the tax ramifications of leaving property to certain individuals and help you minimize the tax costs. In Pennsylvania, for instance, the Inheritance Tax Rates are determined by reference to the relationship of the individual who receives your property. In the example above, the real estate left to your spouse would not be taxed at all (0% tax rate to spouses), the IRA to your child would be taxed at a 4.5% rate (4.5% rate to direct descendants and lineal heirs – “up or down people” on the family tree), the antique left to your sibling would be taxed at a 12% rate (12% rate on transfers to siblings), and the boat left to Dave would be taxed at a 15% rate (15% on transfers to all other heirs). Federal Estate Tax may also come into play for individuals with large estates.
7. Where do you live?
In some states, probate can be a long and arduous process, even with a relatively small amount of money. In order to relieve some of the stress your relatives and descendents will face after your passing, you may wish to hire an attorney to help you avoid probate.
8. Other Factors
Here are some other unique situations in which the assistance of an attorney can be invaluable: (1) you own unusual items that have value (artwork, intellectual property, family heirlooms, etc.); (2) you own a family business; (3) you own assets or property in more than one state; and/or (4) you are elderly and concerned that you may need to spend significant time in a nursing home.
9. The kicker: Do you have the time, energy, and knowledge to effectively prepare your own estate planning documents?
Let’s face it, you’re busy and preparing a will is probably the last thing on your to-do list. If you have the time, energy, and confidence to prepare your own documents, and it makes sense for you to do so under the factors listed above, go for it. On the other hand, many of our clients are willing to invest a little bit to get some help and feel more comfortable knowing that their affairs have been effectively and professionally handled by a person with expertise in preparing such documents. Remember, if you do not have a will, your property will pass under Pennsylvania’s intestacy laws and you will have no say in the matter.
So now you may be asking yourself, “under what circumstances would you recommend working with an attorney to prepare these important documents?” If you have less than $300,000 in assets, have responsible adult children who all get along, and wish to leave everything to your spouse, if surviving, or children outright then you only need a simple estate plan, which you could prepare on your own. If your situation is more complicated, investing in professionally prepared estate planning documents and the legal advice that comes with them, like any other investment, will pay dividends down the road by ensuring that your wishes are followed, giving you peace of mind, and potentially garnering tax and administrative savings.
 This article does not discuss health care or financial powers of attorney; however, I suggest to everyone that having up-to-date powers of attorney is a must because it will ensure that you, your family, and your property is well cared for in the event of serious illness or mental issues (e.g. Alzheimer’s). If you need more information on powers of attorney, I would be happy to answer any questions you may have.