A will is an important part of estate planning—but only a part. Let our skilled estate planning lawyers advise you on how best to update your estate plan.
Let the Lawyers at Hawthorne & Hawthorne Assist You in Updating Your Estate Plan
Estate plans can take many forms. The lawyers at Hawthorne & Hawthorne are able to advise you on the more common estate planning documents, such as wills, powers of attorney, and trusts, in addition to some less commonly considered estate planning documents.
Wills
A last will and testament, or, more simply, a will, is a document directing how to handle your property upon your death. This includes both real property, such as land and houses, and personal property, such as money and cars.
In your will, you will appoint someone to be your “executor,” who is the person that will be responsible for handling your estate. You might also appoint someone to be the guardian of your children, if you still have young children. A will does not take effect until you die.
However, it is important to note that a will usually does not affect property having a payable-on-death designation or transfer-on-death designation. These designations are often found on bank accounts, life insurance policies, and certain other types of property.
Powers of Attorney
A general durable power of attorney, or financial power of attorney, is a document by which you grant a trusted individual (your “agent” or your “attorney in fact”) the power to handle your financial affairs on your behalf. A power of attorney can be useful in many situations, for example, if you take an extended trip abroad and need someone back home to pay your bills for you. However, a power of attorney is most useful if you are diagnosed with dementia or otherwise become unable to manage your affairs, as the power of attorney will enable your agent to manage your affairs without first petitioning a court for permission to do so. As you can imagine, the cost of carrying on such a lawsuit is quite a bit more expensive than the cost of executing a power of attorney while you are still of sound mind. Unlike a will, a power of attorney is only effective during your lifetime; it immediately terminates upon your death.
A medical power of attorney, or advance medical directive, is similar to a general durable power of attorney except that it allows a trusted individual (again, your “agent” or your “attorney in fact”) to make medical decisions on your behalf. A medical power of attorney is primarily useful when you are no longer able to make your own medical decisions, for example, if you are comatose. (Of course, if you are still conscious and otherwise able to make your own medical decisions, the doctors will continue to defer to you rather than your agent.) Like a general durable power of attorney, a medical power of attorney will allow your agent to make healthcare decisions on your behalf without first petitioning a court for permission to do so. Again, the cost of such a lawsuit is easily much greater than the cost of executing a medical power of attorney while you are still of sound mind. A power of attorney is only effective during your lifetime; it immediately terminates upon your death.
Trusts
Finally, a trust is a highly flexible, highly customizable way of directing how your property will be managed and distributed, either during your lifetime or after your death (or both). It is important to note that the probate process in Virginia is not terribly onerous, and so avoiding probate, by itself, is often not a sufficient justification to establish a trust. The two main justifications for establishing a trust are to provide managerial control over assets—perhaps most useful when a loved one tends to make poor financial choices when left to his own devices—or to shelter assets in some way.
These differing goals lead to a wide variety of types of trusts. For example, a trust can be used to minimize estate taxes (the most routine type of which is a “bypass trust”), and it can also be used to provide disposable income to loved ones without disrupting their eligibility for government benefits (a “special needs trust”). A trust may be established either through a provision in your will (creating a “testamentary trust”) or by a standalone trust document (creating an “inter vivos trust”).
Other Types of Estate Planning
These are only a list of the most common estate planning devices. Other estate planning devices, such as family limited partnerships, limited liability companies, or even conservation easements, might be appropriate for your particular situation. Additionally, it is very important to remember that beneficiary designations (such as payable-on-death designations) on bank accounts and other assets are typically not affected by these estate planning devices, so those beneficiary designations should be reviewed and updated regularly.
Update Your Estate Plan Regularly
Remember that your estate plan can (and likely will) change over time; estate planning is not the sort of thing that you do only once. At a minimum, you will need to update your estate plan when major life events happen, such as weddings, divorces, births, and deaths. Ideally, you should be reviewing your estate plan every year or two, much like you go to the doctor for your annual checkup. Make estate planning a habit now, and you will be better prepared to adapt your estate plan when those major life events do occur.
Contact One of Our Experienced Estate Planning Lawyers Today!
When it is time to update your estate plan, it is important to seek competent legal help that you can trust. Our attorneys are experienced and can advise you on how to meet your goals for your estate plan. Our offices are conveniently located for clients throughout Southside Virginia, including clients in Amelia County, Appomattox County, Buckingham County, Brunswick County, Campbell County, Charlotte County, Cumberland County, Dinwiddie County, Halifax County, Lunenburg County, Mecklenburg County, Nottoway County, and Prince Edward County. To learn more about your estate planning options, contact one of our skilled estate planning lawyers today!
