Estate Planning

Introduction – Sometimes there can be confusion about what is meant by "estate planning." It is a great deal more complex than simply preparing a Will. From our perspective, a Will is certainly a key element of an estate plan, but only one of many.

Estate Planning – This is a broad category, but we tend to begin the discussion with a focus on Wills, Advance Medical Directives (a combination of medical power of attorney and a "living will") and General Durable Powers of Attorney. The preparation of those documents will necessarily involve a review and discussion of the family members, finances, assets, liabilities, life insurance, and retirement accounts.

Living Trusts – Some but not all of our clients will elect to use revocable living trusts as part of their estate plans. A revocable living trust can allow our clients to avoid probate, if funded and utilized properly. Although the probate process in Virginia is not necessarily expensive or time-consuming, there are costs associated with it and a number of administrative requirements and deadlines. A certain degree of family privacy is exposed during the probate process. A private trust-based plan avoids those trappings and while there are additional costs associated with building an estate plan around living trusts, they can be very cost-effective and efficient and private in the manner chosen to use and/or distribute the proceeds of one's estate.

Wills – Everyone should have a relatively current and comprehensive Will as a core document in his or her estate plan. Although Virginia has a good system for transferring wealth in the absence of a Will (called "intestacy"), there are a number of basic functions served by a Will that benefit a client both financially and practically.

Naming an Executor and alternates – By naming specific people (typically starting with your spouse), in sequence, you identify those most likely to be familiar with your assets and your testamentary desires. You also have the opportunity to exempt them from the need to obtain private insurance bonding as an additional cost, normally required when there is no Will or where the waiver is not clearly expressed.

Naming a Guardian or Custodian – If you have minor children, or you have adult children but potentially your estate could include a gift to a grandchild, then you may want to consider naming a Guardian (who would have custody of a minor or incapacitated beneficiary of your Will) or a Custodian/Conservator (who would have control of the assets or money you designate for a minor or incapacitated beneficiary).

Specific Bequests and Devises – From our English common law tradition, a bequest is a gift of money or tangible property, and a "devise" is a gift or transfer of real property. Instead of lumping assets together, selling them and converting them to cash, gifts may be made "in kind" (just as they are) in a Will. When real property or other "mortgaged" assets are transferred, there is a question of whether the debt goes too. It can be answered in the document so there isn't any doubt by the beneficiaries.