Estate planning isn’t just for the wealthy or elderly. For anyone with children, a house, investments, or other assets, an intuitive and intelligent estate plan ensures peace of mind for you, your heirs and beneficiaries, and your financial future.
At Melone Hatley, P.C., our experienced Newport News, Virginia trusts and estates lawyers have dedicated themselves to helping clients prepare for the future. Whether you are just beginning to create an estate plan or considering changes after a divorce or other life event, we are here to offer skilled legal guidance and advice.
Understanding the Importance of Trusts and Estates in Virginia
Estate planning is the process of arranging for the management and distribution of your assets upon your death or incapacity. A well-structured estate plan is essential for safeguarding your assets, providing for your loved ones, and ensuring your wishes are respected after you die.
In Virginia, trusts and estates are governed by state laws that dictate how your property is transferred, managed, and protected. A well-developed estate plan ensures that
- Your assets are distributed according to your wishes after your death
- Your beneficiaries are protected, including your minor children or loved one with special needs
- Estate taxes and expenses are minimized
- The legal process is streamlined, avoiding frustration and family disputes
Your estate plan will typically use various tools to protect you and your assets, including a will, trusts, powers of attorney, and advance medical directives.
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What is the Role of a Will?
A will is one of the foundational documents in developing a comprehensive estate plan.
Your will provides a clear set of instructions for distributing your property after your death. Unfortunately, without a will, your assets will be distributed according to intestacy laws, which dictate distribution according to family relationships. With a will, you can leave property to anyone, even if they are not family members.
Your will also allows you to name your executor, or the person who will administer your estate. It is even more critical when you have minor children or a special needs loved one since it allows you to appoint a legal guardian or caregiver.
What if You Die Without a Will in Newport News, Virginia?
If you die without a will in Virginia, the court will distribute your estate according to the state’s intestate succession laws. These laws determine who will inherit your property and in what proportions, typically prioritizing your closest family members, such as your spouse, children, parents, and siblings. Unfortunately, dying intestate can complicate and slow down the administration of your estate and may not reflect your wishes.
If you die intestate in Virginia:
- If you are married with children from your marriage, your surviving spouse will inherit your entire estate.
- If you are married with children from another relationship, your surviving spouse will inherit one-third of your estate, and your children from the previous relationship will inherit the remaining two-thirds.
- If you are not married, your children will inherit your estate.
- If you are unmarried and have no children, your estate will then pass on to your closest living relatives in the following order: parents, siblings and their descendants, grandparents and their descendants, more distant relatives such as great-grandparents or second cousins.
- If no relatives can be located, your estate will pass to the Commonwealth of Virginia.
Dying intestate can have a significant impact on your estate. Intestate succession does not recognize non-family members. Consequently, without a will, you cannot leave property to an unmarried partner, friends, stepchildren, or charities. Your property may instead go to relatives you would not have chosen to inherit, such as estranged family members, and result in family disputes. Furthermore, without a will, the probate process will take longer and legal and administrative costs could significantly reduce the value of your estate.
Your Will and Probate
Even with a will, your estate must still go through the probate process.
During probate, the court will oversee the appointment of an administrator if you do not have a will naming an executor, the collection and inventorying of your assets, and the payment of any of your debts and taxes. The remaining estate will be distributed to your heirs.
Probate can be a long and expensive process due to legal requirements, administrative issues, locating heirs, and potential family disputes. While court oversight ensures fairness and legal compliance, the process can be frustrating for beneficiaries. By creating a comprehensive estate plan and taking steps to minimize probate involvement, you can streamline the process and ensure your estate is handled efficiently. Working with an experienced Newport News, Virginia estate planning attorney is key to reducing possible delays and ensuring your wishes are honored.
Advantages and Limitations of a Will
Although wills are the most commonly recognized of all estate planning tools, it has its limitations. Consequently, you are only partially protected if you have nothing but a will.
While a will enables you to provide clear instructions for asset distribution, designate an executor and choose a guardian to care for your minor children, it only takes effect after your death and doesn’t protect you while you are alive. For instance, if you become incapacitated, your will cannot name someone to take care of your financial affairs or make medical decisions on your behalf. Some assets are not controlled by a will, such as jointly held properties or accounts and life insurance policies with named beneficiaries. Furthermore, your will is still subject to a lengthy and costly probate process, which can reduce the value of your estate.
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What is the Role of Trusts?
Trusts are estate planning devices that can manage your assets both during your lifetime and after your death. One of the primary advantages of a trust is that it bypasses probate and offers greater control over asset distribution, especially if you have unique financial matters that must be considered.
A trust holds assets for your and your beneficiaries’ benefit, which are managed by a trustee named in the trust. Depending on the type of trust, you may be both the grantor (the maker of the trust) and the trustee.
Revocable Living Trusts
Revocable living trusts allow you, as the grantor, to retain control over the assets placed in the trust. If you become incapacitated, a co-trustee will manage these assets on your behalf. As grantor, you can modify or dissolve a revocable living trust at any point during your lifetime. Upon your death, your co-trustee will disburse assets to your beneficiaries, avoiding the probate process.
Irrevocable Trusts
As the name suggests, irrevocable trusts cannot be easily modified or revoked once they have been established. These have a wide range of applications and are often used to achieve specific tax, financial, or legal objectives, such as creditor protection, estate tax reduction, Medicaid planning, and surviving spouse protection.
Special Needs Trusts
Special needs trusts can be created to provide for a disabled loved one without affecting their eligibility for government programs. A special needs trust manages assets that can enhance a beneficiary’s quality of life by covering things beyond basic living care.
Charitable Trusts
Charitable trusts allow you to support charitable causes you care about. They can also provide many tax advantages.
Testamentary Trusts
Testamentary trusts are funded through your will. Upon your death, the trustee will manage the disbursement of the assets in the trust. One of the primary purposes of establishing a testamentary trust is to provide control over how the assets in your will are managed and distributed, which can be essential when your beneficiaries are minor children, special needs loved ones, or others who may not be ready to manage significant financial resources.
You can use one or a combination of trusts to address your specific needs and goals.
Advantages and Limitations of Trusts
While trusts have greater control over the way assets are distributed and managed, they also have some disadvantages.
One of the primary advantages of a trust is the bypass of probate. Since the trust owns the assets, not the individual, it is not subject to the probate process. Certain trusts can help reduce estate and gift taxes. Additionally, a trust can be used for long-term planning, including provisions for managing assets should you become incapacitated. However, establishing and maintaining a trust can be more complex and expensive, requiring ongoing management and adherence to legal requirements.
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Other Essential Estate Planning Devices
Other critical components of a comprehensive estate plan are powers of attorney and advance medical directives.
Powers of Attorney (POA)
A power of attorney grants someone (the agent) the authority to act on your behalf for financial or other specified matters. There are several types of powers of attorney.
- A general power of attorney grants broad powers to your agent to manage your financial and legal matters. A general power of attorney typically ends if you (the principal) become incapacitated.
- A durable power of attorney grants similar powers to the agent but remains effective even if you become incapacitated. A durable power of attorney is typically used to ensure financial management if you are not able to make those decisions for yourself.
- A limited or special power of attorney grants authority to the agent to perform specific tasks only. Once the task is completed, the power of attorney ends.
- A springing power of attorney becomes effective only upon the occurrence of a specific event. This differs from other powers of attorney, which become effective as soon as they are signed.
If you cannot act on your own behalf for some reason, your agent can exercise any authority you have granted them through a power of attorney, including managing your bank accounts, paying bills, selling or purchasing property, operating your business, or applying for government benefits, such as Social Security or Medicaid.
As the principal, you can revoke a power of attorney at any time. Upon your death, the POA is automatically terminated.
Advance Medical Directives
An advance medical directive is a legal document that outlines your preferences for medical care if you cannot make decisions for yourself. A living will or healthcare power of attorney only becomes effective when you cannot make medical decisions on your own, as determined by your doctor.
Typically, the components of advance medical directives are
- A living will that specifies your wishes for end-of-life care and medical treatment, such as the use of life-prolonging measures and pain management and palliative care preferences. It also lets you state whether you want to avoid extraordinary measures to sustain your life if your recovery is unlikely.
- A healthcare power of attorney designates an agent or proxy who can make medical decisions on your behalf if you cannot, such as authorizing or refusing specific treatments, accessing medical records, or deciding on organ donations or funeral arrangements.
- A Do Not Resuscitate Order (DNR) directs medical personnel not to perform CPR if your heart stops or you stop breathing. A DNR should be discussed with your physician and added to your medical records.
An advance medical directive ensures your preferences are respected and removes the emotional burden on your family by providing clear guidance regarding your wishes.
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The Importance of Working With an Experienced Estate Planning Attorney in Newport News, Virginia
An estate plan is far more than just a will. It is a tailored strategy designed to protect your assets, provide for your loved ones, and ensure that your wishes are considered both during your life and after your death. A well-developed estate plan is essential for anyone wanting to minimize uncertainty and maximize control over their assets and legacy.
No matter your age or financial circumstances, having an estate plan in place provides peace of mind that you and your loved ones will be cared for in the future. Consulting with an experienced estate planning attorney is the best way to create a plan that reflects your values and goals. At Melone Hatley, P.C., our experienced Newport News, Virginia trusts and estates attorneys are here to help. We are dedicated to providing our clients with clear, objective, and compassionate advice and guidance, whatever their concerns and goals may be. Call us at (757) 690 – 7779 or schedule a free consultation through our website contact form.
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