As we welcome the New Year, it’s a time for fresh beginnings and important resolutions. One resolution that should top your list is starting your Virginia estate planning, or updating your existing estate plan.
Why is estate planning critical in Richmond, VA?
As our estate planning lawyers know, it gives you control of your affairs while you’re alive and after you pass away. While no one likes to think about the possibility of becoming incapacitated or the inevitability of death, with a comprehensive estate plan, you can rest assured knowing your family members or other trusted individuals will uphold your choices for medical care and the management of your estate.
Additionally, establishing an estate plan enables you to minimize estate and gift taxes, avoid inheritance disputes, and prevent loved ones from having to undergo the public probate process.
Regardless of the size of your estate, at PJI Law in Richmond, VA, we create estate plans customized to the needs and desires of each client. Our estate planning attorneys recognize that securing the future of your family and protecting your legacy are paramount. We understand the nuances of Richmond estate planning and remain committed to helping you achieve peace of mind.
Read our estate planning checklist below, then contact us at (804) 653-3450 for personalized service and attention.
List Your Assets and Liabilities
Whether you have an existing estate plan or are embarking on the process for the first time, begin by taking an inventory of your assets — physical, financial, or digital — and your liabilities to gain a full understanding of everything that comprises your estate. Assets may include:
- Real property
- Cars
- Jewelry
- Collectables
- Personal items
- Savings accounts
- Life insurance
- Retirement accounts
- Businesses
- Bonds
- Stocks
Liabilities may include:
- Credit cards
- Mortgages
- Lines of credit
- Auto loans
- Other outstanding debts
Assess Your Current Estate Plan
If you already have an estate plan, now is the perfect time to review and update it. Changes in life circumstances such as second marriages, divorces, births, or asset acquisitions may necessitate revisions. Our estate planning attorneys in Richmond can help you align your plan with your current wishes and goals.
Whether revising your estate planning documents or beginning the process, estate plans can include various documents, depending on the needs and circumstances of individuals and families. Consider incorporating the following elements for an effective estate plan.
Establish a Will
Drafting a will is a foundational step in estate planning. Wills, which take effect upon death, enable individuals to specify beneficiaries for their property and appoint guardians for minor children.
To be legally valid, wills in Virginia must meet the following requirements:
- Age and Capacity: The person making the will (the testator) must be at least 18 years old and of sound mind, meaning they understand the nature of making a will and the effects of their decisions.
- Written Document: Wills must be in writing. Oral wills are not recognized in Virginia.
- Signature: The will must be signed by the testator. If the testator is unable to sign, another person can sign on their behalf, but this must be done in the testator’s presence and at their direction.
- Personal Representative: In your will, you can designate a personal representative to handle your estate administration after you pass away. Probate lawyers recommend choosing a trustworthy individual to fulfill this critical duty.
- Witnesses: The will must be signed in the presence of at least two competent witnesses. These witnesses must also sign the will in the presence of the testator and each other.
- Intent: The testator must have the intent for the document to serve as their last will and testament.
- Voluntariness: The will must be made voluntarily, without any undue influence, coercion, or duress.
As with all estate planning documents, review and update your will periodically. An estate planning lawyer in Richmond can keep your will compliant with Virginia laws and reflective of your current wishes.
Keep in mind that a will must go through probate, a public process that can be lengthy and costly, and require the assistance of a probate attorney. If you wish to avoid probate, consider including trusts in your estate planning.
Set Up a Trust
Richmond, VA trusts bypass the probate process and facilitate a smoother transition of assets to your loved ones. Because you can tailor Virginia trusts to your specific needs, they offer flexibility and security.
The elements of a trust include:
- Grantor: The person who creates the trust
- Trustee: The individual or entity responsible for managing the trust assets and trust administration
- Beneficiary/Beneficiaries: The person or persons who will receive the trust assets and benefits
- Funding: Transferring assets into the trust to be managed by the trustee
- Terms and Conditions: Instructions for how and when trust assets are distributed to beneficiaries
What is a Living Trust vs. a Testamentary Trust?
A living trust, also known as an inter-vivos trust, goes into effect during the grantor’s lifetime. You can make changes to or revoke a living trust at any time. A testamentary trust is created within a will and goes into effect upon death. It cannot be modified or revoked after the testator passes away.
What is the Difference Between a Revocable Living Trust and an Irrevocable Trust?
The grantor can change or terminate a revocable trust at any time, while they cannot modify an irrevocable trust. While irrevocable trusts offer greater asset protection and some tax benefits, they require careful consideration and planning. Working with a knowledgeable attorney in the Richmond area can help you determine the best type of trust for you, based on your unique circumstances and goals.
Create Advance Medical Directives
Advance medical directives express your healthcare wishes in case you become incapacitated and unable to communicate them yourself. In Virginia, advance medical directives may include:
- Durable Powers of Attorney/Medical Powers of Attorney: These documents allow individuals to appoint someone to make medical decisions on their behalf if they are unable to do so.
- Living Wills: Living wills state an individual’s preferences for end-of-life care. A living will specifies the types of life-sustaining treatments you do or do not want.
- Do Not Resuscitate Order (DNR): DNRs instruct medical professionals not to attempt life-saving measures, such as CPR, defibrillation, medication, or artificial breathing, if your heart or breathing stops.
These documents uphold your preferences for medical care, empowering someone you trust to make decisions on your behalf if necessary. Consulting a Virginia attorney to properly prepare and execute these documents according to state law is a wise choice.
Appoint Powers of Attorney
With powers of attorney you can designate someone you trust, known as an agent, to manage your financial or legal affairs should you become incapacitated. This person can make decisions regarding your finances, property, and investments, handling your matters according to your wishes.
Our attorneys can help you implement the right powers of attorney for your needs. Your options include:
- Durable power of attorney
- General power of attorney
- Limited power of attorney
- Springing power of attorney
Your designated agent must abide by a set of guidelines when deciding on your behalf. This individual must perform their duties competently and diligently, with your best interests in mind.
Furthermore, your agent must avoid conflicts of interest, keep records and provide them when requested. Lastly, they must preserve the estate plan as long as it is in your best interests. Our attorneys in Richmond can discuss these responsibilities and guidelines with you in greater detail during a consultation.
Designate Beneficiaries
Another essential element of estate planning is designating beneficiaries for your assets. Beneficiaries are the individuals or entities that will receive your assets after you pass away.
As part of your estate plan, you can designate beneficiaries for various accounts and policies, such as:
- Life insurance
- Retirement accounts (401(k), IRA, TSP)
- Bank accounts
- Investment accounts
- Real estate
- Business interests
Choosing specific beneficiaries allows your assets to pass to the intended recipients without going through probate or being subject to creditor claims or tax implications. Regularly review and update your beneficiary designations to reflect any changes in your circumstances or wishes.
Review Transfer-on-Death Designations
In addition to beneficiary designations, you have the option to designate transfer-on-death (TOD) beneficiaries for real estate. Similar to beneficiary designations, with a Virginia TOD you can transfer ownership of your real estate property to a designated beneficiary upon your death.
The deed is recorded with the county clerk’s office and becomes effective only after your passing. Until then, you retain full control and ownership of the property, and you can revoke or modify the deed at any time. Our attorneys advise our clients to regularly review and update TOD designations because they are legally binding and cannot be changed after your passing.
Create Clear Instructions for Your Personal Representative
As we noted above, your personal representative handles your estate administration. As part of your estate planning efforts, we recommend creating a document informing them about where to locate your assets and all necessary documents, including logins and passwords of your digital assets.
Business Planning
If you own a business, a succession plan is vital for its continuity. Business succession planning ensures that your business can thrive even after you step down, whether due to retirement, incapacity, or passing. It involves designating successors and outlining the transition process clearly.
An attorney from our law firm can help you:
- Choose an exit strategy
- Create a plan to ensure a seamless transition
- Select a successor
- Connect with the right financial and insurance advisors
- Limit taxes
Start the New Year with Confidence in Richmond, VA with PJI Law
Embarking on the New Year by estate planning can give you and your loved ones peace of mind. At PJI Law, our trust and estate counsel offer clients personalized service and attention. Our practice areas include wills, trusts, advance medical directives, powers of attorney, business succession planning, deed preparation, transfer-on-death deeds, probate law, trust administration, and estate plan maintenance.
Don’t wait until it’s too late contact our Richmond office today at (804) 653-3450 or complete our online form to schedule a consultation. Find out how we may be able to help you create a comprehensive estate plan that secures your legacy and protects your family members and all loved ones.
Copyright © 2024. PJI Law, PLC. All rights reserved.
The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.
PJI Law, PLC
4108 E Parham Rd,
Richmond, VA 23228
(804) 653-3450
https://pjilaw.com/
