Estate planning can feel overwhelming—or even intimidating—for many people. It’s often seen as something “only the wealthy” need, or something to tackle much later in life. Yet, as Jessica Rafferty, a Pennsylvania-based estate planning attorney, shared in our recent “The Playbook: By Your Side Chat,” the reality is very different.
“You don’t need a lot of assets to benefit from planning. Even a young adult with a checking account and student loans should have a will, powers of attorney, and a living will in place,” Rafferty said.
Estate planning isn’t just about money. It’s about protecting what matters most and giving your family guidance during times of uncertainty.
Start Early: Estate Planning Isn’t Just for the Wealthy or Retirees
Many people assume that estate planning is only necessary once you’ve accumulated significant assets or are approaching retirement. But Rafferty stresses that estate planning should begin at age 18, when you’re legally an adult. Even if you have minimal assets, certain documents are critical.
Rafferty shared a real-life example: a 19-year-old college student was struck by a car, and because her parents lacked powers of attorney, they couldn’t make urgent medical or financial decisions. Documents like these can protect you and your family in unexpected situations, no matter your age or net worth.
The plan can—and should—evolve over time. As your financial situation, family structure, and life circumstances change, your estate plan should adapt.
Cost and Process: What to Expect
For a basic estate plan in Pennsylvania, Rafferty charges $750. The process typically includes an initial consultation (about 1–1.5 hours) to discuss your goals and concerns, drafting your documents based on your instructions, and a signing appointment or follow-up discussions if needed.
The documents included in a basic estate plan are as follows:
1. Wills: A will ensures your assets go where you want. It can also designate guardians for minor children, a step that’s critical for parents.
2. Powers of Attorney: These documents allow someone you trust to make decisions on your behalf if you are unable. They cover financial and healthcare decisions separately, giving clarity in challenging times.
3. Living Wills: A living will communicates your preferences for medical care if you are incapacitated, so loved ones and providers know your wishes.
“A few documents can prevent years of confusion and emotional strain,” Rafferty emphasized.
How do I choose?
One of the trickiest decisions in estate planning is designating the parties that will act on your behalf. When it comes to executing your will, Rafferty advises selecting one organized, proactive person rather than multiple children. While some clients want to name two children, this can create logistical challenges—coordinating signatures, managing sales, or handling accounts can become cumbersome.
• Geography matters less than reliability: A child who lives farther away but is organized may be better than one nearby who procrastinates.
• Different roles for different children: You can appoint one child as executor and another as financial power of attorney, depending on their strengths.
• Communicate your decisions: Explaining your reasoning to your children can prevent misunderstandings and hurt feelings.
For families with minor children, trusts and guardianship designations become critical. These tools ensure assets are managed responsibly and children’s daily care is clearly outlined. Worksheets provided by Rafferty can guide families through these sensitive conversations.
Is probate really that bad?
As Rafferty explains, with clear documentation and designated points of contact, probate is nothing to fear. Probate often has a negative connotation, but in Pennsylvania, the process is relatively streamlined and most families don’t even notice the probate process.
Assets typically transfer in one of two ways:
1. Through a will: Assets pass to your beneficiaries under the supervision of the probate process.
2. Through contracts: Accounts with designated beneficiaries, transfer-on-death accounts, or jointly owned property usually bypass probate.
Regardless of how assets pass, they are all subject to Pennsylvania’s inheritance tax.
Gifting and Taxes
Some families consider gifting during their lifetime as a way to reduce potential Pennsylvania inheritance tax or federal estate and gift taxes.
The Pennsylvania Inheritance tax rate is a flat percentage based on how you’re related to the people you are leaving your money to:
- 0% for spouses
- 4.5% for parents, children, grand-children — anybody on the lineal part of the family tree
- 12% for siblings
- 15% for all others — nieces, nephews, cousins, unrelated people including an unmarried partner
Federal gift and estate tax rules work differently than state inheritance tax. For PA, inheritance tax is owed on every dollar in the estate. At the federal level, federal tax is only involved if the individual estate value is over a certain threshold — in 2026, that’s $15 million per person — or if the gift amount exceeds the annual exclusion amount — $19,000 in 2026. To explain the annual exclusion — you can gift $19,000 to as many individuals as you please without having to report the gift as giver or receiver. When you gift over the annual exclusion amount, your tax preparer will need to help you file a federal gift tax return.
Timing is also an important consideration for gifting. If you are in a situation where you may eventually need to go into a skilled nursing home and would be looking to qualify for medical assistance, there is a 5-year look back on any gifts you make. Additionally, gifts made shortly before death reduce the annual exclusion to $3,000 for PA inheritance tax purposes.
When considering gifting strategies, Rafferty cautions, “Never give away assets you might need later. It’s important to plan with both your current needs and your family’s future in mind.”
Consulting with a financial advisor ensures that gifting strategies don’t create unintended consequences, like jeopardizing your financial stability or creating tax challenges for your heirs. A common example of a situation that warrants consultation with a professional would be considering gifting or selling one’s home to children. Many factors play into whether or not this is a beneficial move — especially whether or not your child intends to keep or sell the property after you pass. While it may seem to be an obvious strategy to eliminate the 4.5% inheritance tax by gifting the home during your lifetime, in the event of a future sale, we shouldn’t overlook the likely reality of the capital gains tax assessed on the sale of the property which depending on timing and the circumstances can end up being far more of a tax burden than the 4.5% inheritance tax.
Trusts: When They Make Sense
Trusts are often marketed as a “must-have” for estate planning, but the reality is more nuanced. They are useful in specific situations:
• Minor children or beneficiaries with special needs
• Blended families with complex asset distribution needs
• Long-term care or asset protection planning
“There are certain types of trusts that work for certain people — it’s not right for everybody,” Rafferty explained. For most families, a carefully drafted will combined with powers of attorney and living wills is sufficient.
What Happens If You Do Nothing?
If you become incapacitated without powers of attorney, your family may need to petition the court for guardianship in order to help make decisions for you. Court hearings, medical testimony, and judicial oversight are required and ultimately, the court chooses who makes decisions — not you.
If you die without a will, Pennsylvania intestacy laws determine asset distribution and the outcomes may surprise you. Real estate and other assets may be split in unintended ways.
Estate planning is not about predicting the worst. It’s about removing uncertainty.
Keeping Your Plan Current
Estate planning isn’t a “set it and forget it” process. Life changes—marriage, divorce, births, deaths, or major financial shifts—require updates. Rafferty recommends reviewing your plan every three to five years, or sooner if circumstances change.
“Reviewing your documents ensures they reflect your goals and protect your family the way you intend,” she said.
Regular updates can prevent confusion and conflict among heirs, keeping your plan aligned with both your wishes and the realities of your family’s situation.
Practical Tips for Starting
1.Start Early: Don’t wait until retirement or a major life event. Even young adults benefit.
2.Talk Openly: Conversations with family members about your intentions reduce stress and miscommunication later.
3.Document Clearly: Legal documents give concrete guidance for decision-makers.
4.Seek Professional Advice: A qualified estate planning attorney and a financial advisor can help tailor your plan to your unique circumstances.
Estate planning is the gift of guidance and security for your family when the unexpected occurs. It’s not just about documents, it’s about protecting your family, reducing taxes where appropriate, avoiding court involvement and making sure your wishes are honored.
Whether you’re 18 or 80, with modest assets or substantial wealth, taking the time to create and maintain a thoughtful estate plan is one of the most important steps you can take for your family’s future. Consult with qualified professionals like Jess Rafferty and your financial advisor to ensure your plan meets your unique needs.
Because planning ahead is one of the most meaningful ways to be by your family’s side — even when you no longer can be.