According to Caring.com, for the first time since 2020, the number of Americans with a will has declined, with only 32 percent reporting that they have an estate plan in 2024. The 40 percent of Americans who don’t have a will cite a lack of assets as the primary reason, with lower-income Americans twice as likely to cite this reason as the highest-income group.
However, as experienced Richmond estate planning lawyers know, estate planning is vital for everyone, regardless of wealth or income. At PJI Law, PLC, our estate planning attorneys have helped many individuals and families in and around Richmond create estate plans tailored to their unique needs and circumstances. This blog shares the most frequently asked questions we receive about Richmond estate planning. Continue reading for an overview, then contact us at (804) 653-3450 for personalized service and attention.
What Is Estate Planning?
Briefly, estate planning involves making decisions about the management of your assets if you become incapacitated or pass away. Should you become incapacitated, another person would have to manage your bank accounts, pay your bills, authorize medical treatment, and oversee your assets. Married couples might assume the other spouse would fulfill these responsibilities—but what happens if your spouse is also incapacitated? In your estate plan, you can designate a personal representative and backup representatives, conferring legal authority to them to carry out your wishes.
While facing the prospect of our own mortality is difficult, since you cannot take your bank accounts and possessions with you, creating an estate plan enables you to decide in advance who will receive your assets—whether family members, friends, charities, or places of worship. With the guidance of experienced estate planning attorneys in Richmond, you can establish an estate plan that fulfills your wishes and complies with Virginia laws.
If My Estate Is Small, Do I Still Need a Virginia Estate Plan?
As we mentioned, surveys demonstrate that a common misperception persists that estate plans are only for the wealthy. However, regardless of your estate’s perceived simplicity, everyone needs an estate plan that legally outlines their wishes for medical care if they become incapacitated, designates personal representatives to act on their behalf, and identifies their beneficiaries. Under Virginia intestacy laws, if you die without a will, your assets will go to your closest relatives—which may or may not align with your desires. If you experience a devastating accident without leaving written instructions, a Virginia judge will control your person and your estate.
Why Does Everyone Need an Estate Plan?
As experienced Richmond estate planning attorneys can attest, a well-executed estate plan:
Can I Create My Own Virginia Estate Plan?
In today’s digital landscape, countless websites explain how individuals can make their own estate plans. However, these websites often lack data about Virginia or federal statutes and contain outdated information pertaining to estate planning laws.
Furthermore, estate planning is a highly individualized process that considers the unique circumstances and goals of each person. At PJI Law, PLC, our estate planning lawyers provide knowledgeable advice tailored to you and your situation. Working with us, you can rest assured that we are up to date on estate law as regulated by the Commonwealth of Virginia, the federal government, and the Internal Revenue Service.
What are the Four Foundational Estate Planning Documents?
There are four foundational estate planning documents everyone in and around Richmond, Virginia should have, regardless of their financial circumstances.
Wills
Wills are an essential component of an estate plan. A legally valid will ensures the distribution of your property according to your wishes after you pass away. Wills enable couples and individuals with minor children to designate a guardian to secure their future should both parents tragically die before their children turn 18. Wills are also excellent vehicles for giving back to society through a contribution to your choice of charity.
Unlike a trust or a power of attorney—legal instruments that address incapacitation—a will only becomes effective upon death.
Virginia Requirements for Legally Valid Wills
Virginia state law has specific mandates for wills, including:
- Age: the testator (the person creating the will) must be 18
- Written: wills must be documented in writing; Virginia does not recognize oral wills
- Competence and Voluntary Creation: Wills must be made freely by testators with sound minds, without the undue influence of others
- Witnesses: Wills must be witnessed by two individuals
Trusts
Although many Americans mistakenly believe trusts are for the wealthy, all income levels can benefit from this excellent estate planning tool. Once established, a trust helps you:
- Minimize taxes
- Avoid probate
- Distribute assets as you desire
With a trust, you can also provide for the continued care of disabled loved ones and beloved pets when your life ends.
The Three Trust Components
Grantor/Settlor – the grantor, also referred to as the settlor, is the person who creates the trust
Trustee – the trustee is the person with conservatorship of the trust property and has a fiduciary responsibility to abide by the terms of the trust. Trustees know and uphold the wishes of grantors.
Beneficiary – the person or persons designated by the grantor to receive the contents of the trust. Beneficiaries can include spouses, family members, minor children, other loved ones or organizations, to include charities of the grantor’s choosing.
Various trust options are available in Richmond, Virginia
Revocable Living Trusts
One of the most significant benefits of a revocable living trust is that it helps avoid probate court, with smooth asset distribution to your beneficiaries. This flexible option allows you to maintain control over the contents of the trust while offering the ability to make changes as needed.
Irrevocable Trusts
As the name suggests, you cannot change an irrevocable trust once you establish it. In exchange for these stringent rules, you receive distinct advantages, including asset protection from creditors and a reduction of your tax burden. When you transfer assets into an irrevocable trust, they no longer count toward your estate’s value, potentially diminishing your estate tax liability. People often leverage irrevocable trusts for specific estate planning purposes, such as life insurance policies or charitable giving.
Special Needs Trusts
These trusts seek to provide for individuals with disabilities while still enabling them to qualify for government assistance.
Qualified Terminable Interest Property Trusts (QTIP)
These trusts care for a surviving spouse by providing income during their lifetime, with the remaining assets going to the settlor’s beneficiaries upon the surviving spouse’s death.
Testamentary Trusts
These trusts are established by wills and take effect after the settlor’s death. These legal instruments oversee asset distribution for beneficiaries. Because testamentary trusts are born out of wills, they do not avoid probate but instead are administered through the probate process.
Charitable Trusts
The settlor can enjoy tax benefits and benefit a specific charity or cause with charitable trusts.
Pet Trusts
With a pet trust, you can ensure that someone will care for your pets after you pass away.
Spendthrift Trusts
A spendthrift trust protects your beneficiaries from their own bad financial decisions by limiting their access to trust funds.
Generation-Skipping Trusts
A generation-skipping trust ensures asset transfer to the settlor’s grandchildren, bypassing their children to minimize inheritance complications and preserve long-term wealth.
Powers of Attorney (POAs) in Richmond, VA
Have you thought about who would manage your affairs if you became incapacitated? Powers of attorney enable individuals to designate someone they trust to assume these responsibilities, without petitioning the court. Powers of attorney offer security and spare your loved ones the ordeal of a drawn-out legal process.
Furthermore, powers of attorney spare your loved ones the need to seek a conservatorship or a guardianship through the courts—which can create a hardship for family members and postpone much-needed assistance. A power of attorney secures your well-being and fulfills your intentions, even in unanticipated circumstances.
Four Types of Powers of Attorney
There are four types of powers of attorney in Virginia:
Durable Power of Attorney
Durable powers of attorney help you secure your future in the face of unexpected events such as sudden mental incapacitation or permanent disability by delegating authority to a trusted agent to manage your affairs and making decisions that reflect your wishes and interests.
General Power of Attorney
With a general power of attorney, you can appoint your agent to oversee various tasks, from matters of personal finance to more complicated decisions to run your affairs smoothly during your absence.
Limited Power of Attorney
As the name implies, a limited power of attorney confers specific authority to your agent for a defined purpose or period. For example, if you cannot attend a real estate closing, your agent can complete the transaction on your behalf.
Springing Power of Attorney
Prepare for the unexpected with a springing power of attorney, which only takes effect in specific situations like mental incapacitation or permanent disability. By establishing this legal document ahead of time, you can ensure that your personal and financial affairs will be managed efficiently when needed, providing you with peace of mind during challenging times.
Advance Medical Directives
Ensure your wishes are honored in times of incapacity. While a power of attorney handles finances, an advance medical directive appoints someone to make medical decisions for you. Gain peace of mind knowing your choices will be respected, even when you can’t express them. Working with experienced Richmond estate planning lawyers, you can create a clear directive that cannot be misinterpreted.
Three Things You Can Achieve with Advance Medical Directives
- Designate a Trusted Healthcare Agent – choose someone who will uphold your wishes if you cannot express them yourself. Our Richmond, Virginia attorneys will guide you through the process of appointing an agent who will have the legal authority to make medical decisions for you.
- Outline Your Healthcare Instructions – control your medical care by explicitly stating your preferences. Our estate planning lawyers will help you create clear, legally binding instructions.
- Donate Your Organs or Tissues – save lives by donating your organs or tissues to those in need or to research institutions.
Do Advance Medical Directives Give Healthcare Agents Unlimited Authority?
No. Your healthcare agent can only make decisions for you when needed, following your guidance on life support and other crucial matters. If there are no instructions for a specific circumstance, your agent will decide based on your values and preferences.
How Do I Choose the Right Agent for My Advance Directive?
Estate planning attorneys serving Richmond and the surrounding areas can provide knowledgeable and compassionate legal assistance as you navigate the process of selecting a trustworthy healthcare agent.
Can Estate Planning Help Me Avoid the Probate Process in Virginia?
Many people seek to avoid probate, the legal process through which estate administration takes place for a deceased individual, according to the terms outlined in their will. Although probate offers critical oversight, the public probate process can demand a significant amount of time and money. Due to the complexities of probate law, the personal representative would benefit from hiring a probate attorney to provide legal assistance throughout the process. For grieving families, probate can create additional stress and hardship.
The good news? Experienced and knowledgeable estate planning lawyers in Richmond can help you minimize or even avoid probate, utilizing several strategies.
Revocable Living Trusts
Establishing a revocable living trust allows you to transfer ownership of your assets to the trust during your lifetime. Upon your death, the assets held in the trust pass directly to the named beneficiaries, bypassing probate. Additionally, a living trust can provide for the management of your assets if you become incapacitated.
Joint Ownership with Right of Survivorship
Secure your assets by holding them jointly with a spouse or child in Virginia. Ensure seamless transfer of ownership to the surviving joint owner upon your passing. Common forms of joint ownership include joint tenancy with right of survivorship and tenancy by the entirety.
Payable-on-Death (POD) and Transfer-on-Death (TOD) Designations
Specific assets like bank accounts, retirement accounts, and securities, can include POD or TOD designations. Designating beneficiaries allows these assets to pass directly to them upon your death, avoiding probate.
Beneficiary Designations
Update your beneficiary designations now to ensure asset distribution to the right people without the involvement of probate. Make sure your life insurance policies, pension plans, and annuities reflect your current wishes.
Small Estate Affidavit
In Virginia, you can facilitate easy asset distribution to beneficiaries with a small estate affidavit if your probate estate is valued below $50,000. Avoiding the formal probate process saves time and money.
If I Own a Business in the Richmond Area, Do I Need to Engage in Business Planning?
For business owners, business succession planning is a critical component of estate planning. You have worked hard for your success and business succession planning with the help of estate planning attorneys can ensure that your business continues to run smoothly after your death, safeguarding its legacy and protecting your employees and stakeholders. Your lawyer can guide you through this process, taking your unique situation, needs, and goals into account.
Do I Need to Regularly Review My Estate Plan with a Lawyer?
In our many years of practicing law, we understand the wisdom of engaging in a regular review of your estate plan, to ensure it’s current with your wishes and life circumstances. Change is the one thing we can count on in life, and events like divorces, second marriages, the birth of children or grandchildren, and other events demand estate planning revisions and updates. Our law firm, serving Richmond and its surrounding areas, stands ready to assist you throughout life’s inevitable changes.
PJI Law, PLC: An Experienced Estate Planning Law Firm Serving Richmond and Surrounding Areas with Personalized Attention
Established in 2010, our firm, PJI Law, PLC provides personalized, high-quality legal assistance to clients seeking to engage in estate planning. Our attorneys care about you and your family and want to help you prepare for the future with a comprehensive plan that addresses your wishes, complies with Virginia law and federal law, and provides peace of mind. Our Richmond, VA law firm offers our clients individualized attention and premium service. To learn more about estate planning and how we can tailor a plan that provides for your family and other loved ones, minimizes taxes, and upholds your wishes, contact us at (804) 653-3450 or complete our online form to schedule a consultation in Richmond, VA.
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://www.pjilaw.com/
