Estate Planning General Questions
What is estate planning?
Estate Planning is simply the process of planning for how your assets and other belongings will be utilized or distributed in the event of your incapacity or death. You may think the word “estate” only applies to the super wealthy, but this is not true. Everyone who owns anything has an estate, and so estate planning applies to everyone.
When you pass away, your family is going to need instruction from you about what to do with your belongings. However, an estate plan does more than just contemplate your death. It also considers who would have authority to make decisions on your behalf if you become incapacitated. It plans for how your children would be cared for if you were to pass away. And, it allows you to give specific instruction about how your assets are distributed and when. It also gives you the chance to let your loved ones know how to make end-of-life decisions for you.
When should I update or change my estate plan?
Estate plans should be updated whenever you have a major life event, such as when you get married, divorced, or have children. Otherwise, it is a good idea to review your estate plan at least every five years.
What is included in an estate plan?
An estate plan consists of a will, medical directive (which includes a medical power of attorney and living will) and potentially, a power of attorney document and trust, if you choose. Some estate plans involve updating your deed as well and creating other documents of instruction.
When is the right time to consider estate planning?
It is never too early! Basically, if you are an adult, then it is the right time!
Can I write my own will?
Technically you can, but it isn’t a good idea. Many individuals don’t know what provisions to include in a will and create documents that are confusing to interpret. Self-written wills may not be accepted if the handwriting of the decedent cannot be validated by the court. An experienced attorney is familiar with current law and knows what provisions to include in the document. And, an attorney can help you avoid common mistakes that may cause your will to be contested after you die.
What happens when someone dies without a will?
When someone dies without a will in Virginia, his or her assets are passed by intestate succession. The intestate succession laws are based on family relationships in existence at the time of death. The law is found here.
What is a pour over will?
A pour over will is created if you have a trust. This kind of will “pours” any remaining assets to the trust at your death that may not be already titled under the trust.
What is a living trust?
A living trust is a way to pass money or assets in a more customized way than can be done with a will alone. It is “living” because it is created while you are alive. It is fully amendable and revocable. And, it has several advantages, particularly:
- A trust can hold money for minor children (or even adult children) to be paid out based on your instruction.
- Use of a trust avoids the probate of your estate at your death.
- A trust provides privacy since a probated will becomes public record.
- A trust can help ensure your assets are available for your care in the event of your incapacity.
- There are other advantages, but livings trusts aren’t for everyone. Mathews Law will happily discuss your specific situation to help you decide if a trust is for you.
Is setting up a trust difficult?
Not at all. Setting up a trust is easy. Mathews Law does all the work of creating the trust. There is some additional work after the trust is created. Your assets will need to be retitled under the name of the trust. If this step isn’t done, then the trust is not funded. This is a very important step.
What is the difference between a revocable and an irrevocable trust?
The difference is just as it sounds. A living revocable trust can be amended or completely revoked while you are alive; an irrevocable trust cannot be modified. The vast majority of trusts are revocable and irrevocable trusts are typically used for special circumstances. Mathews Law does not draft irrevocable trusts.
Is a living trust a good option for a single person?
Absolutely! Depending on your situation, it may be right for you.
Will a living trust affect my income taxes?
No. While you are alive, the trust assets are taxed to the grantor (or the person who created the trust) as part of your personal tax return.
Medical Directives and Power of Attorney Documents
What is the difference between a living will and a medical power of attorney?
A living will is a document that specifies your direction for end-of-life medical treatment. A medical power of attorney designates who can make medical decisions for you in the event that you are unable to make them for yourself. In Virginia, both of these documents are contained within the Advance Medical Directive. Mathews Law includes an Advance Medical Directive in each of our Estate Planning Packages.
How will my doctor know if I have an advance directive?
You should provide this document to your doctor to keep on file. You should also provide this document to your family and to the person you name as medical power of attorney so that he or she can inform the doctor as needed.
What is a Durable Power of Attorney (DPOA)?
A DPOA is a document that appoints an agent to manage your affairs (but not make medical decisions for you) while you are alive, and grants him or her authority to essentially act legally on your behalf. The reason it is called “durable” POA is because the Agent continues to have authority in the event that you are incapacitated.