Even though you may feel that you don’t have an “estate,” it’s clear that everyone needs estate planning. And though you may be young and healthy, and not really thinking about your mortality, this is the time to “get your affairs in order.” Estate planning isn’t only for the wealthy or the old. You probably have more assets and responsibilities than you realize. You have income. You may have gotten married, have children, maybe bought a house. Maybe you own a boat, have savings, a retirement account, and even life insurance. Life is unpredictable.
The question you need to ask yourself is what would happen to your assets if you died or became incapacitated? Would your dependents be left in a precarious situation? What steps can be taken now, to spare your loved ones and dependents the fear and uncertainty that comes when an estate plan isn’t in place?
Remember, the goal of good estate planning is to plan for any eventuality and ensure that your assets go to the people that you want to benefit after you’re gone.
Execute a last will and testament
A will is the first and most important document of your estate plan and does three very important things:
- It details and gives instructions as to how your assets will be distributed at your death;
- Names your executor, the person or people who will be responsible for carrying out these instructions; and
- Specifies a guardian and/or caregiver for your minor children.
Without a will, the intestacy laws of the Commonwealth of Virginia will decide who receives your assets and they may not be distributed according to your final wishes.
Put a durable power of attorney in place
A power of attorney or POA, is a legal document that allows you to appoint a trusted individual to act on your behalf and manage your financial affairs if you become incapacitated or unavailable to do so yourself. The person appointed, your agent or attorney-in-fact, can do the things you would do yourself, if able, like pay the mortgage or rent and other bills, cash or deposit checks, collect or pay debts, manage your business, sell your home, and even apply for public benefits for you, if necessary. Having a durable power of attorney eliminates the guess-work about who should be in charge of making important financial decisions on your behalf if you cannot. It helps avoid conflict and confusion by family members and loved ones during a very stressful time.
Create an advance medical directive
An advance medical directive, sometimes called a living will, is a legal document that lets you control who makes medical decisions for you during times when you cannot, due to serious illness, accident, or incapacity. This allows an individual to:
- Appoint a healthcare agent to enforce the advance medical directive and make healthcare decisions when you can no longer make them for yourself.
- Detail your own health decisions and care instructions…what treatments you wish to have, or not have, and for how long.
- Document your decisions about organ and tissue donations.
An advance medical directive relieves stress and conflict during a difficult time since your medical decisions have been made, by you, in advance, and aren’t placed in the hands of family members, doctors, and even judges who may know very little about your wishes and the type(s) of care you would want during a catastrophic event.
Consider a revocable living trust
A revocable living trust is a legal document in which you transfer your assets, including your home, bank accounts, investment accounts, vacation home, etc. into the trust and manage them as the trustee during your lifetime. Although the assets are technically owned by the trust, you continue to use them as you normally would. You live in your home, deposit and write checks, pay bills, and use your money and other assets as you wish.
If you become incapacitated, due to illness or accident, the named successor trustee manages the trust for you and can step in without the intervention of a court. Unlike some other estate planning documents, a trust cannot be rejected by the court and you can avoid conservatorship and guardianship proceedings.
Upon your death, the successor trustee distributes the assets in the trust per your wishes. The trust legally owns the assets, so your estate does not have to go through probate and usually can be settled within a few weeks. A revocable living trust is flexible and can be changed or even revoked at any time.
Northern Virginia Trusts & Estates
Northern Virginia Trusts & Estates offers affordable estate planning services for Virginia residents. Our firm understands the intricacies of estate planning and offers a range of services from simple, a la carte pricing for single items, to comprehensive offerings that cover a variety of preparations.