An estate plan is a set of legal documents that serves as an outline of what will happen to things including insurance policies, property, accounts or even minor children, after you pass away. It is an important tool because it ensures your wishes are carried out and your loved ones are provided for in the event of your death. Even more than that, an estate plan can establish plans for long-term care before any crucial decisions need to be made. Here are six key components that a successful estate plan in Virginia should include.
1. A Will
A will is a legal document that outlines how assets will be distributed after death – sort of like a set of instructions. It is important to have a will in place to ensure that your assets are distributed according to your wishes and to avoid any disputes among heirs to anything you may leave behind as an inheritance. Your will is also a place to name guardians of children in the event of your death.
2. A Power of Attorney
A power of attorney is a legal document that allows an individual to appoint someone to act on their behalf in financial and legal matters. Without a power of attorney, the local Virginia circuit court is left to decide who manages your assets and how through by appointing a conservator, which obviously might not be what you intended. A power of attorney avoids this and is useful if you become incapacitated and aren’t able to make an important decision for yourself regarding your financial or other personal matters.
3. A Health Care Directive
A health care directive, also known as an advance directive, is a document that outlines a person’s wishes for medical treatment. Your “agent,” or person designated to act on your behalf, can direct healthcare professionals as to how to continue your medical care if you aren’t able to direct them yourself. It’s important to choose someone who knows the medical decisions you would choose for yourself and will carry them out according to your requests if necessary. In the event you aren’t competent enough to make your own decisions, healthcare professionals will rely on the agent you choose to speak on your behalf when it comes to your medical care.
4. A Trust
A trust is a legal entity that holds assets for the benefit of another person or entity. Trusts work similarly to leaving your inheritance in a will, but often they may be more beneficial, because a will only becomes active after you die. A trust protects your assets and allows your wishes to be made known if you become incapacitated while you’re still living.
5. Beneficiary Designations
Beneficiary designations are an important part of an estate plan because they determine who will receive assets such as life insurance policies, retirement accounts, bank accounts and personal property after a person’s death. You should review and update these designations regularly to make sure they reflect your intentions for your assets. This is especially vital because beneficiaries listed on policies can collect them even if their name isn’t listed in a will or trust. Beneficiaries must also be mentally competent and above the age of 21, otherwise the court may get involved in the distribution of the policy left behind. Working with an experienced estate planning attorney is important so that they can give you guidance on how to make the designations that dovetail and support your wishes as outlined in your will or trust.
6. Funeral and Burial Instructions
Last, but definitely not least, your funeral and burial instructions need to be laid out in your estate plan. If you have nothing else prepared, your family will thank you for including instructions for your funeral and burial. Include any paid burial plans or insurance coverage and the location of these records with your other plan documents. This helps alleviate the burden of decision-making on your loved ones during a difficult time.
Overall, an estate plan should be tailored to your individual needs and goals. We can work with you to ensure that all necessary documents are in place for an estate plan to be properly executed. If you want to be sure you’re leaving behind well-laid plans for your loved ones, attend Promise Law’s free estate planning workshop. Attending a workshop can help you make the best possible plan for your future and long-term care. If you attend the workshop, you also get a complimentary one-on-one consultation with an experienced Virginia estate planning attorney. Contact us today to get started.