Most Virginia families and singles have a plan for their lives. However, many neglect to think about what will happen to their hard-earned assets should they pass away or are unable to care for themselves. If you’re asking yourself, “Do I need an estate plan?” the answer is “Yes.”
Estate planning is essential for all individuals at any age in life. You might be young and believe that death is way off in the future. Or you may be older and think that your estate plan is solidly in place. These are common misconceptions that can lead to problems with your estate or your ongoing healthcare if not addressed.
What is Estate Planning?
In simple terms, estate planning is the creation of legal documents that contain your plan for how your assets will be distributed upon your death and/or how your assets will be used for your care should you become incapacitated.
Generally, an estate plan consists of 1) a will, 2) an advanced medical directive (also called a living will and designation of a healthcare power of attorney), 3) a financial power of attorney, and possibly 4) a trust
Under Virginia law, a will is a legally binding document that contains your directions for how your assets will be distributed when you die. If you do not have a will when you die, your assets will be distributed according to the default rules of intestacy, which may result in your assets being used in a manner you do not want.
Advanced Medical Directive (Living Will/Medical Power of Attorney)
An advanced medical directive includes instructions about your medical care in the event that you are unable to act on your own behalf, such as in the case of a coma or vegetative state. This legal document outlines your wishes for your medical or end-of-life care and also allows you to designate a proxy/power of attorney; someone who will make healthcare decisions on your behalf.
Financial Power of Attorney
A financial power of attorney enables you to give someone the ability to make financial decisions on your behalf should you unable to act on your own behalf.
A trust allows you to set rules for how your assets will be handled either while you are alive or after you have died. To initiate a trust, you transfer assets to a trustee, another person who holds legal title to your property and assets and uses them as you direct in a trust agreement. Often a trust is established to care for minor children or for individuals who cannot care for themselves due to medical or psychological issues. Or a trust can establish a smoother transition of assets upon your death. Trusts can also create tax benefits for both the beneficiary and the donor. There are a number of types of trusts, and a number of benefits to setting up a trust that should be discussed with your estate planning attorney.
What Estate Planning Ensures
Estate planning ensures that you will be taken care of should you become incapacitated, and that distribution of your assets and ongoing care of your dependents will be secured should you die. Although an estate is not legally required by law, it is important to know that without one, you leave it up to the courts to decide your fate or the resolution of your estate.
Do I Need an Estate Planning Attorney?
Death and accidents can happen at any time, at any age, so it is never too soon – or too late – to set up your estate plan. Since legal documents can be complicated, it is recommended to consult with an estate planning attorney to create the safeguards for your particular needs. Your attorney will guide you as to the best vehicles for protection and tax benefits, and aid in creating your legally-binding arrangements.
If you already have an estate plan in place, you should review it periodically with your estate planning attorney. Life situations change. You might have several new grandchildren you want to include in your will, you may have undergone a divorce or death of a spouse, or your health may have become compromised. Keeping your estate plan up to date is essential for the successful execution of your desired outcomes once it is needed.
Whether you are young or old, because you never know when an accident or death may occur, you need an estate plan. Don’t wait until it’s too late. See an estate planning attorney now.