WILL

A will is the basis of any solid estate plan, and is an official written document that states your intentions for your estate. More importantly for parents, a will communicates your preferences for guardians of your minor children.

A will nominates executors and lists beneficiaries in order of inheritance. A properly designed instrument can also contain testamentary trust provisions to house a child’s inherited estate and appointment of trustees, to protect assets and ensure they are used to maintain a beneficiary’s health, education, and general well-being until the beneficiary reaches adulthood. Such trust provisions direct that final distribution of an inheritance is postponed until a beneficiary reaches a suitable age for self-management of finances.

If you have a blended family structure, the Commonwealth of Virginia has laws in place to distribute your estate between current spouses and children from former relationships if you die without a valid will. A well-drafted will ensures that your estate passes the way you plan, rather than in accordance with the state’s intestacy guidelines.

Wills should be drafted, witnessed, and executed in a specific manner under Virginia law, in order to be recognized as valid. An experienced Virginia estate planning attorney can help you navigate the ins and outs of asset passage, trust creation, and guardianship nominations, ensuring your wishes are met and that the transition process is as smooth as possible.

EXECUTOR

Your executor is the primary fiduciary for your estate, and presents your will for probate to the clerk’s office in the county where you reside at death. After qualification and appointment by the probate clerk, your executor represents the best interests of your estate, and makes distributions in accordance with your wishes. Qualified executors may also opt to retain an attorney or other professional service to assist with distribution of the estate.

GUARDIAN for MINORS

The word “guardian” under Virginia law can have many different meanings, but for the purposes of Arbor estate planning documents, a guardian is a person nominated by the parent to take over physical custody of an underage child after both parents are deceased. The courts in Virginia have the final approval of any person so nominated, but without a will, the court can only consider those persons who bring themselves forward for appointment; such family members or friends may not have been the first choice of the parents.

TRUSTS

A Trust is an entity created on paper which can hold title to assets for management on behalf of an individual or class of beneficiaries. Trusts come in a variety of shapes and sizes and serve many purposes, but two of the most common forms of trusts for general estate planning are testamentary trusts and inter vivos (living) trusts.

A testamentary trust is the framework of a trust included in the language of your will, which would create a trust only if necessary to hold assets for young beneficiaries until certain conditions are met, such as the beneficiary reaching an appropriate age to assume management responsibilities for assets held as part of the trust fund. Testamentary trusts are part of a “Will & Testament” and are a safety net to protect assets from youthful spenders. Grantors can also include a testamentary trust for a spouse in certain planning scenarios.

An inter vivos revocable trust is a fully drafted and executed instrument, with specific provisions for the current management and distribution of assets on behalf of beneficiaries such as the Grantor, the Grantor’s spouse, and the Grantor’s children from current and prior marriages. Active trusts can hold title to real estate and other financial assets, and can be designed for maximum flexibility in management and distribution of those assets during a grantor’s lifetime.

The development of an inter vivos trust package is more costly than standard planning with wills and testamentary trusts, because the attorney and grantor are handling the drafting of a full trust document and retitling of assets during a grantor’s lifetime, but living revocable trusts provide for a grantor’s increased control over asset management and distribution after death, and trusts avoid probate when properly funded.

Both testamentary and living trusts can be the designated as the beneficiary of life insurance policies and other beneficiary accounts.

Support trusts for young beneficiaries: Also known as a HEMS trust (for Health, Education, Maintenance, and Support), a support trust can be created when needed for a young beneficiary who would otherwise inherit outright, to manage funds on behalf of the beneficiary and to delay outright payout until the beneficiary reaches an age of maturity. HEMS trusts are typically included in the secondary line of distribution, and fortunately are usually not needed if the testator lives a long, healthy lifespan.

TRUSTEE

The trustee is a fiduciary role charged with managing trust funds on behalf of the trust beneficiaries. For revocable living trusts, the client is the trustee of her or his own trust until incapacity or death; for a trust held for a youthful beneficiary, a trustee will manage and distribute assets on behalf of the young beneficiary until such beneficiary reaches the age of distribution, or will be responsible for retaining a professional trust management company to do so.

Distributions from trusts created for children under a standard will provide for the health, education, maintenance, and support of beneficiaries.

POWER of ATTORNEY for FINANCES

A financial power of attorney is a formal document assigning certain powers to an agent to act on the behalf of the grantor (the client). Powers of attorney can be durable (active from the time the document is signed), or springing/limited (active only after a certain intervening event is documented, such as the physical incapacity of the grantor, or for a limited purpose such as purchase of real estate). Powers of attorney can be very useful in avoiding court appearances in the event the grantor becomes incapacitated, of if one spouse needs the other spouse’s signature on a financial document while the other is traveling or otherwise unavailable.

POWER of ATTORNEY for HEALTH CARE/ ADVANCE MEDICAL DIRECTIVE:

A durable power of attorney for health care appoints an agent to make medical decisions on your behalf when you are incapacitated, and give your agent access to your medical files when you are unable to convey your preferences for health care, such as when you are unconscious or suffering from an impediment that prevents informed communication. Your medical power of attorney can grant general decision-making power to your agent, trusting that the agent will make decisions based on what your agent believes would state that if at any time your attending physicians determine that you have a terminal condition where the application of life-prolonging procedures would serve only to artificially prolong the dying process, your agent may direct that such procedures be withheld or withdrawn, and that you be permitted to die naturally. These provisions can be removed for clients who wish to have a more basic Health Care Power of Attorney, or who may object to the AMD language for religious, scientific, or medical reasons.
*Advance Medical Directives are also known as Living Wills; the Virginia legislature enacted a law authorizing this form of directive and the appointment of an agent, and adopted the phrase “Advance Medical Directive” in lieu of the less-specific and somewhat confusing “Living Will” language.

INTESTATE

When a person passes away without a valid will in place, that person is considered to be “intestate” and the Virginia statutory scheme for distribution of assets will govern who inherits and how they receive their share of the estate. Virginia Code Section § 64.2-200 lists the order of intestate succession if no will is in place.