If you die without a will in Pennsylvania, your children will receive an “intestate share” of your property. The size of each child’s share depends on how many children you have and whether or not you are married.

For children to inherit from you under the laws of intestacy, the Commonwealth of Pennsylvania must consider them your children, legally. For most families, this is not a confusing issue. But it’s not always clear. Here are some things to keep in mind.

• Adopted children: Children you legally adopted will receive an intestate share, just as your biological children do.
• Foster children and stepchildren: Foster children and stepchildren you never legally adopted will not automatically receive a share.
• Children placed for adoption: Children you placed for adoption and who were legally adopted by another family will not receive a share. However, if your biological children were adopted by your spouse, that would not affect their intestate inheritance. (20 Pa. Cons. Stat. § 2108.)
• Other relatives placed for adoption: A relative other than your child, for example, your grandchild who was legally adopted by another family may receive a share of your estate if the relative would otherwise be entitled to inherit from you and you have “maintained a family relationship.” (20 Pa. Cons. Stat. § 2108.)
• Posthumous children: Children conceived by you but not born before your death will receive a share. (20 Pa. Cons. Stat. § 2104.)
• Children born outside of marriage: If you were not married to your children’s mother when she gave birth to them, they will receive a share of your estate if (1) you and their mother get married later, (2) you acknowledged your paternity, or (3) your paternity is otherwise proved under Pennsylvania law. (20 Pa. Cons. Stat. § 2107.)
• Children born during your marriage: Any child born to your wife during your marriage is assumed to be your child and will receive a share of your estate.
• Grandchildren: Your grandchildren will receive a share only if their parent (your child) predeceases you.

If you have any questions regarding Pennsylvania Intestacy Laws contact Gregory J. Spadea at 610-521-0604. The Law Offices of Spadea & Associates, LLC specializes in Probate, Estate Administration and Estate Litigation.

A Power of Attorney is a written document in which a competent adult individual (the “principal”) appoints another competent adult individual (the “agent”) to act on the principal’s behalf. In general, an agent may perform any legal function or task that the principal has a legal right to do for him or herself. You may wish to sign a Power of Attorney to give your spouse, children, or partner the power to handle your affairs if you become ill or disabled.

A Power of Attorney is an important part of estate planning because it gives one or more persons the power to act on your behalf if you become incapacitated. The power may be limited to a particular activity such as the sale of your home, or general in its application, empowering one or more persons to act on your behalf in a variety of situations. It may take effect immediately or only on the occurrence of a future event. The latter are “springing” powers of attorney. It may give temporary or continuous, permanent authority to act on your behalf. A Power of Attorney may be revoked, but Pennsylvania requires written notice of revocation to the person named to act for you.
The term “durable” in reference to a Power of Attorney means that the power remains in force for the lifetime of the principal, even if he or she becomes mentally incapacitated. The Power of Attorney can be effective immediately on signing or only on disability. A principal may cancel a Power of Attorney at any time for any reason. Powers granted in a Power of Attorney document can be very broad or very narrow in accordance with the needs of the principal. A durable Power of Attorney stays in effect even if someone becomes disabled.

Every adult has day-to-day affairs to manage, such as paying the bills. Many people are under the impression that, in the event of catastrophic illness or injury, a spouse or child can automatically act for them. Unfortunately, this is wrong, even when joint ownership situations exist. A Power of Attorney allows your partner or another person to administer your assets during your lifetime, either on disability or now.

With a valid Power of Attorney, your agent can take any action permitted in the document. Often your agent must present the actual document to invoke the power. For example, if another person is acting on your behalf to sell an automobile, the motor vehicles department generally will require that the Power of Attorney be presented before your agent’s authority to sign the title will be honored. Similarly, an agent who signs documents to buy or sell real property on your behalf must present the Power of Attorney to the title company. The same applies to sale of securities or opening and closing bank accounts.

What if you become incapacitated and do not have a Power of Attorney?

The lack of a properly prepared and executed Power of Attorney can cause extreme difficulties when an individual is stricken with severe illness or injury rendering him or her unable to make decisions or manage financial and medical affairs. In Pennsylvania you must follow the legal procedure to be appointed as a guardian. This means involvement of lawyers to prepare and file the guardianship petition and doctors to provide medical expert testimony regarding the mental incapacity of the subject of the action. The procedures also require the involvement of a temporary guardian to investigate, even intercede, in surrogate proceedings. This can be slow, costly, and very frustrating. In addition, the domestic partner can be challenged in a guardianship by the incapacitated person’s family members.
Advance preparation of the Power of Attorney could avoid the inconvenience and expense of guardianship proceedings. This needs to be done while the principal is competent, alert, and aware of the consequences of his or her decision. Once a serious problem occurs, it is usually too late.

How Should The Agent Sign?

Assume Keith Richards appoints his wife, Patty Hanson, as his agent in a written power of attorney. Patty, as agent, must sign as follows: Patty Hanson, POA for Keith Richards. Note that Patty would sign her name in her capacity as Keith’s agent and not Keith’s name.

If you need a Power of Attorney please call Gregory J. Spadea at 610-521-0604 of the Law Offices Spadea & Associates, LLC.

If you are asked to serve as a trustee it means the person asking you trusts your judgment and is willing to put the welfare of the trust beneficiaries in your hands. Before you agree to serve as the trustee of the trust you should ask the following seven questions before agreeing to serve as a trustee:

1. Q: May I read the trust?
   A: The trust document is your instruction manual. It tells you what you should do with the funds or other property you will be entrusted to manage. Make sure you read it and understand it and do not be afraid to ask the drafting attorney any questions you may have.
2. Q: What are the goals of the grantor who is the person who created the trust? A: Unfortunately, most trusts say little or nothing about their purpose. They give the trustee considerable discretion about how to spend trust funds with little or no guidance. Often the trusts say that the trustee may distribute principal for the benefit of the surviving spouse or children for their “health, education, maintenance and support.” Is this a limitation, meaning you can’t pay for a yacht (despite arguments from the son that he needs it for his mental health)? Or is it a mandate that you pay to support the surviving spouse even if she could work and it means depleting the funds before they pass to the next generation? How are you to balance the needs of current and future beneficiaries? It is important that you ask the grantor while you can. It may even be useful if the trust’s grantor can put his intentions on paper in the form of a letter addressed to you.
3. Q: How much help will I receive?
   A: As trustee, will you be on your own or working with a co-trustee? If working with one or more co-trustees, how will you divvy up the duties? If the co-trustee is a professional or an institution, such as a bank or trust company, will it take charge of investments, accounting and tax issues, and simply consult with you on questions about distributions? If you do not have a professional co-trustee, can you hire attorneys, accountants and investment advisors as needed to make sure you operate the trust properly?
4. Q: How long will my responsibilities last?
   A: Are you being asked to take this duty on until the youngest minor child reaches age 25, in other words for a clearly limited amount of time, or for an indefinite period that could last the rest of your life? In either case, under what terms can you resign? Do you name your successor trustee or does someone else?
5. Q: What is my liability?
   A: Generally trustees are relieved of liability in the trust document unless they are grossly negligent or intentionally violate their responsibilities. In addition, professional trustees are generally held to a higher standard than family members or friends. What this means is that you won’t be held liable if for instance you get professional help with the trust investments and the investments happen to drop in value. However, if you use your neighbor who is a financial planner as your adviser without checking to see if he has run afoul of the applicable licensing agencies, and he pockets the trust funds, you may be held liable. So, be careful and read what the trust says in terms of relieving you of personal liability.
6. Will I Have to post a bond?
   A:You may be required to post a bond if you do not serve with a professional co-trustee such as an attorney or bank. The purpose of the bond is to protect the trust assets due to your malfeasance. The insurance company that issues the bond may require you to file and annual report. Therefore it is important to read the trust to see whether you are required to purchase one.
7. Q: Will I be compensated?
   A: Often family members and friends serve as trustees without compensation. However, if the duties are especially demanding, it is not inappropriate for trustees to be paid something. The question then is how much. Professionals generally charge an annual fee of 1 percent of assets in the trust. Often, professionals charge a higher percentage of smaller trusts and a lower percentage of larger trusts. If you are doing all of the work for a trust, including investments, distributions and accounting, it would not be inappropriate to charge a similar fee. However, if you are paying others to perform these functions or are acting as co-trustee with a professional trustee, charging this much may be seen as inappropriate. A typical fee in such a case is a quarter of what the professional trustee charges, or .25 percent (often referred to by financial professionals as 25 basis points). In any case, it’s important for you to read what the trust says about trustee compensation and discuss the issue with the grantor.

If you have any questions about serving as a trustee call Gregory J. Spadea at 610-521-0604 of Spadea & Associates, LLC in Ridley Park, Pennsylvania.