October is National Financial Planning Month. As you and your spouse take steps this month to organize your finances, budget, prioritize your goals, and make new investments, it only makes sense to also think about who you’ll pass your estate onto after you’re gone. After all, consider these scenarios:
- If you’re securing new life insurance this month to provide for your minor children in the event of your untimely death, how will you ensure the funds will be spent the way you want it to be in your absence?
- Who would make decisions about how your emergency fund is spent if you were incapacitated due to an illness or injury?
- Who would inherit your house if you and your spouse were to die?
These “what ifs” – which will become realities someday – are the reason why you need to take steps this National Financial Planning Month to make plans for your estate. Every adult in Virginia needs an Advanced Medical Directive, Powers of Attorney, and depending on their situation, a will or a trust, such as a Guardianship and Trust Will if they have minor children.
What is an Advance Medical Directive?
An Advance Medical Directive, also known as an Advance Healthcare Directive, is a set of legal documents recognized by our state that tells both healthcare providers and courts the type of medical treatment you want in the event you can’t express your choices yourself. These documents also name the people, in order of succession, who you have pre-authorized to make medical decisions for you if you’re incapacitated.
Advance Medical Directives state your wishes for a variety of medical scenarios including what you might encounter if incapacitated, including whether or no you would want:
- Life support.
- Pain management.
It’s important to get an Advance Medical Directive now so you can both officially state your wishes, and prevent your family from having to make these choices for you if you were to become too sick or injured to voice your desires yourself.
What are Powers of Attorney?
Just as an Advance Healthcare Directive grants your permission for another person to make medical decisions on your behalf, a durable Power of Attorney document designates who you authorize to make financial and business decisions for you if you can’t yourself. It’s an extremely important document for you to have if you were to become medically incapacitated and needed someone to continue arranging your financial affairs, or if you were abroad and an emergency financial situation for your family arose.
What Are Wills, Trusts, and Guardianship and Trust Wills?
The final document that every adult needs is either a will, trust, or guardianship and trust will. We’ll discuss who needs what – and why – below.
Everyone needs a will. A will allows you to name your final wishes for your property and your burial or cremation, and name an executor for your estate. Your estate’s executor should be someone you trust because he or she will be responsible for carrying out your final wishes.
Many people want the beneficiaries to have immediate access to the estate and will choose to have a trust, which is an estate document that allows assets to completely avoid the months or years of being tied up in the probate process.
All parents of minor children need a guardianship and trust will. This legal document lists who would become your children’s guardians and raise them if you were to die while they were still minors. Without a guardianship and trust will, surviving family members may fight over who cares for your children, and ultimately, a judge will decide who will become their guardians.
We Can Help You Plan Your Estate This National Financial Planning Month
This National Financial Planning Month, it’s never been easier to make sure all your financial affairs are in order.
Get help planning your estate, call our offices at (703) 938-3510 or Click Here to Request a Free Consultation.