What would happen to your family should you unexpectedly pass away or face a period of significant disability? Estate planning is an important step you need to take to protect your interests. It gives you the freedom to say that you have all of your personal affairs in order. It helps to carry out our wishes and to take care of our loved ones once you’re gone.
If you don’t have an estate plan, the Commonwealth of Virginia will make one for you. And often it isn’t what you would have wanted or what is best for you and your family. Without proper planning, funeral costs, estate taxes, and other financial obligations can weigh on your family. If you pass away without a plan in place, your family may need to sort out the mess in court.
Each person has different needs, depending on their age, health situation, family dynamics, and financial situation. No matter what your situation in life may be, you should have an estate plan that is tailored to your needs. We can help you make key decisions and prepare legal documents that will protect you and your assets.
Wills
A will can help make the transition after a loss as painless as possible for your family. Wills typically describe the estate, name individuals who will receive specific property, and dictate any special instructions you may have.
A person who creates a will can feel secure in knowing that everyone will honor the will’s instructions. The property will be transferred quickly and many tax burdens can be avoided.
On the other hand, a person who passes away without a will runs the risk of a court or other estate administrator making decisions that do not reflect the person’s wishes and intentions.
A person may need a will for many reasons:
- ensure that his or her property will pass to the intended beneficiaries
- eliminate the possibility for an unwanted guardianship of property
- nominate a guardian for any minor children
- nominate the preferred person or bank to serve as the executor and the trustee if needed
- provide the executor with the necessary administrative powers in order to enable the executor to administer the estate as efficiently and economically as possible
A will usually appoints a personal representative or executor to perform the specific wishes of the testator. Testators typically choose a family member or close friend. The chosen representative needs to be advised of his or her responsibilities before the testator dies, to ensure that he or she is willing to undertake these duties.
What makes a will valid?
Formal requirements for wills vary from state to state. The testator usually must be an adult and understand the effects and consequences of the will. Wills must be written. The testator must sign his or her own will and a person must witness or notarize the signature.
Even if you’re not too concerned about what happens to your remains or your belongings after you die, keep in mind that your surviving family members will have to make these arrangements in your absence. All too often the courts need to sort out and resolve the complications families can face during this difficult time.
We have the opportunity to make that unfortunate event as stress- and pain-free as possible for our families.
Living Will/Advanced Medical Directives and Power of Attorney
No one wants to think about the possibility that they could become unable to make their own medical decisions. However, this becomes a reality every day for people who have an accident or a sudden health emergency.
If this happens to you, the last thing you want to put your family through is wondering what your wishes would have been or who you would have wanted to make healthcare decisions on your behalf.
A living will/advanced medical directive and a power of attorney are legal documents that provide you with options for expressing medical care preferences and instructions, should you become mentally incapacitated or otherwise unable to make or communicate decisions.
With a living will/advanced medical directive, you’ll be able to designate the medical treatment you wish to receive. A power of attorney, on the other hand, allows you to designate a person who can make decisions for you.
Living Will/Advanced Medical Directives
A Living Will/Advanced Medical Directive is a document in which you can state your wishes regarding your health care or end-of-life treatment if you ever become unable to voice these wishes in a medical emergency.
By creating a living will or advanced medical directive, you can accomplish two important goals:
- you inform family members of the types of treatment that you want and don’t want
- and you provide them with advanced notice of your intentions so that there’s no uncertainty later on.
In general, if a living will meets legal requirements, then the instructions it provides are legally valid and binding.
This legal document, generally in three parts, outlines:
- Appointment of an Agent and a Successor, to carry out the health care decisions stated in the Directive and make medical decisions on your behalf, in the event that you cannot do so yourself.
- Health Care Instructions, which serve as a guideline of how your care is delivered in the event you are unaware of your surroundings and/or death is imminent.
- Organ Donation Preferences.
Through this document, you can also express whether or not you wish to:
- be given life-sustaining treatments in the event you are terminally ill or injured
- be provided food and water via intravenous devices
- use heart-lung machines, ventilators, and other medical equipment and techniques that will sustain and possibly extend your life
Power of Attorney
Most people who think about estate planning immediately think about a will or a trust. However, one of the most important estate planning documents is the power of attorney. Every person over the age of eighteen should have one.
Some of the key decisions include choosing an agent and successor agent. You would need to feel confident with them to serve under a power of attorney. The agent you select will be responsible for making decisions on your behalf in the event you are unable to express your preferences, because you are unconscious or because your mental state is such that you do not have the legal capacity to make your own decisions.
They would handle your financial and real property issues in the event that you cannot do so for yourself, such as:
- bill paying
- investments
- buying or selling your home
- and purchasing or cashing in life insurance policies.
With health care power of attorney, you give someone else the power to make decisions on your behalf on medical and end-of-life treatments.
Living Will or Power of Attorney?
By creating a living will, you provide medical and end-of-life care instructions that the health care personnel are obliged to follow. If you choose to create a health care power of attorney, you grant another person the legal authority to make medical treatment decisions on your behalf.
Keep in mind that one option you have through a health care power of attorney is to provide specific instructions for your agent. This option resembles a living will, with the added benefit of having an agent advocate for your interest. A second option you have through a health care power of attorney is to provide your agent with flexibility. They can make decisions that take into consideration the circumstances of your injury and your medical status.
How an attorney can help
If you have questions about a living will and a health care power of attorney, our attorneys can answer them and help you find the right fit for you. We can help you create a living will or power of attorney that states your wishes and decisions clearly.
Health Insurance Portability and Accountability Act
Under the Health Insurance Portability and Accountability Act (HIPAA), doctors and medical professionals cannot release a patient’s medical information to anyone who has not been previously authorized to have access to them.
For this reason, it is important that you execute a document that authorizes specific people to have access to your medical records in the event that you experience a medical emergency.
Trusts
Trusts are another estate planning tool you can use to manage your property and avoid tax burdens. A trust can either be created during a person’s lifetime or after death, by a will. There are a number of different types if trusts serving a wide range of functions. We can separate all trusts; revocable and irrevocable trusts.
A revocable trust, often called a “living trust”, are trusts in which the person making the trust transfers their title of property into the Trust, serves as the initial Trustee, and has the ability to remove, change, modify, alter, or entirely revoke the trust during their lifetime. Trusts of this sort are useful because the trust owns the property, rather than the person making the trust. As such, when the person dies, the property held in trust is not subject to probate.
An irrevocable trust, by contrast, is one that cannot be altered, changed, modified, or revoked once it has been created.
Trusts, regardless of their type, have some common features. A trust is a transfer of legal ownership of property or assets from the property owner, called the trustor to a person or institution responsible for handling the property, called a trustee. This property is held for the benefit of a third party, called the beneficiary.