What Is Estate Planning?

Estate planning is a process that primarily addresses who will receive your assets at death and the manner in which those assets are transferred to your beneficiaries.  Further, a successful estate plan provides for the management of your assets if you are unable to manage them yourself and expresses your wishes as to end-of-life decisions.   Like many, you may think that estate planning is simply the writing of a Last Will and Testament, but a Will is only one part of the process.  Your estate plan does not have to be complicated, but it should be complete.

WHAT HAPPENS IF I DON’T PLAN?

Neglecting to establish a personal estate plan often has unintended consequences at best, disastrous consequences at worst:

• If you become incapacitated or incompetent and have not named a person to handle your finances, someone will have to petition the Court to be appointed as your Conservator in order to pay bills and manage your financial affairs.
• If you have a terminal condition and have not expressed your wishes in a Living Will, you may be kept alive artificially for years while your family argues about what they think you would want.
• If you die without a Will or Revocable Living Trust, the Commonwealth of Virginia will determine who receives your assets and in what amounts.  As a result, spouses may not receive the amount you thought, children from a prior relationship may be disinherited, or a distant relative you’ve never met may receive assets you worked hard to earn.
• If you die or are incapacitated and have not named a guardian for your minor child, the Court will choose a guardian.
• If you add a child’s name to your accounts for convenience sake, you may accidentally disinherit your other children, because a jointly held asset passes to the survivor by operation of law.  If your child decides to “do the right thing” and share the money with another sibling, he or she could incur gift tax liability.
• If you leave assets outright to a child with marital or spending problems, those assets may be subject to divorce proceedings, quickly squandered, or confiscated by the IRS.
• If you own a business and die without any succession planning, your spouse may inherit a business he or she has no interest in running and decide to sell, thereby displacing valuable employees and eliminating the possibility of keeping the business in the family.

WHICH DOCUMENTS SHOULD I HAVE?

Your documents should accurately reflect individual goals and concerns and your unique family situation.  There is no such thing as a “one size fits all” estate plan.  However, the following documents are often part of the process:

• Financial Power of Attorney:  Names someone to handle your finances during lifetime if you are unable to handle them yourself.
• Advance Medical Directive, including a Living Will and HIPAA Authorization: Names someone to make medical decisions on your behalf if you cannot make them yourself and expresses your wishes about artificial postponement of death in the event of a terminal condition.
• Last Will and Testament:  Names who will receive your assets upon death, who will be in charge of administering your estate, and nominates guardians for any minor children.  If you have a Revocable Living Trust, you should also have a Pour Over Will which provides instructions for any asset not owned by your Trust.
• Revocable Living Trust:  A private, written agreement between you and the Trustee through which your assets can be managed during your life and be distributed to your beneficiaries at death without the delay, hassle, and publicity of probate.

IT’S ALL ABOUT PEACE OF MIND.

No matter how much or how little you have, your estate plan should be practical, flexible, and reflective of your wishes.   If you have questions or would like to establish a plan that’s right for you, contact us to schedule an appointment.  It’s one of the best investments you can make for you and your family!