Estate planning is critical for everyone. Whether you have a large family or no children, estate planning can be the best way to prepare your assets and debts for distribution after you pass. If you do not act, the Commonwealth of Virginia will be left to decide about your estate. For instance, failing to name a guardian for your children can put them in the foster care system. You must designate where your assets should go (whether to loved ones or a charity) to avoid the state of Virginia making those decisions.
Estate planning can help you avoid these situations. However, creating a will or a trust should be manageable for you. Let one of our Virginia estate planning attorneys help you make an estate plan that meets your unique needs. Contact Montagna Law at 757-622-8100 to learn more.
Trusts and wills are two of Virginia’s most often-used estate planning tools. They allow an individual to create an estate plan that can be either very general or extremely specific. While these tools can be helpful, not everyone will need both a will and trust. Each document accomplishes different goals and has distinct legal requirements.
A will is a signed legal document that describes what will happen to someone’s property after they pass away. The person who signs this document is a testator. Any mentally competent person can create a last will and testament, but a will may be invalidated if there is evidence of fraud, duress, or undue influence by others.
A will can accomplish several of goals for the testator. For example, it can do any of the following
In Virginia, a will is valid until you revoke it. Once you create a will, you can change it at any time. It should be reviewed and updated as your life changes, particularly with significant changes like marriage, divorce, or parenthood.
A trust is a fiduciary arrangement with another person or entity. That means you, as the person who creates the trust (the settlor), empower another person to hold and distribute assets according to your specific directions. Trusts are highly flexible, so the settlor can provide general instructions or detailed terms about how your executor should distribute assets to your beneficiaries.
Like a will, any mentally capable person can create a trust. It requires a written, legal document that meets specific qualifications under Virginia law.
There are many types of trusts. A revocable trust can be altered or canceled entirely at any time. If you have a revocable trust at the time of your death, it will usually convert into an irrevocable trust at your passing. An irrevocable trust cannot be changed or set aside absent unusual circumstances.
Creating a trust can have a variety of benefits. It provides more control over wealth and assets after you pass compared to a will. Many individuals use it to control their legacy. They dictate the use of certain assets or funds, sometimes decades into the future. One of the primary benefits of an irrevocable trust is asset protection.
Trusts can also be helpful if you are concerned about estate taxes or keeping your estate private. When a will is probated, it is a public process. The court oversees asset administration and approves the executor’s actions. In contrast, a trustee carries out the duties of a trust privately, with little or no oversight from the court in most situations.
If you pass away without a will, you die “intestate.” If this occurs, the Virginia Code has various rules and requirements to administer your assets. The state decides who will receive your assets based on Virginia Code. These rules might not be what you had in mind for your estate, but your desires will not matter without a valid will.
The following general rules apply to those who die intestate in Virginia:
According to a survey done by AARP, roughly 60% of adults do not have a will in place. Without a will, they might subject themselves to higher taxes and fees. It may also result in providing assets to family members who have no real relationship with them.
Ultimately, if you do not have a will or another estate planning tool, you allow the Commonwealth of Virginia to decide what will happen to your assets. You may want to use a will to control the transfer of your estate.
Creating a will has many benefits. Everyone’s financial and life situation is different, so these benefits will vary in usefulness from person to person.
Having someone you trust to handle your estate can alleviate the uncertainty of anyone doing estate planning. They know that a reliable, trustworthy person will follow the directions in their will, with the oversight of the court system.
A will can be a good resource if you want to dictate where your assets go and how much money loved ones should receive. You can even provide a specific list of hard assets, like furniture or heirlooms, and set out who you would like to receive each one.
In Virginia, you can use your will to name a guardian for your minor children. Unfortunately, if you do not choose a guardian for your children, there is a real risk that they will end up in the foster care system. Married couples may assume that this type of situation will never happen because both parents will not pass away at the same time, but you may be surprised to learn just how often this type of situation arises. Naming a guardian protects your children in case the unthinkable happens.
A living trust becomes an irrevocable trust upon your passing. However, there are some things that a will can do that a trust cannot. For example, a revocable living trust cannot name a guardian for your minor children. It also cannot administer any assets that are not in the trust. If you have assets the trust does not own, you must use a will to address those as part of your estate plan.
Some assets cannot be moved into a trust. The most common examples of these assets include
Many of these assets have separately named beneficiaries or designations. However, if the asset is not in a trust and has no separate beneficiary, it should be addressed by a will.
A living trust is an invaluable estate planning tool. Nonetheless, it cannot completely replace a will simply because it cannot perform all of the same functions as a will.
Probate is the process by which the state administers a will. The probate court in Virginia oversees this legal process, which validates the will involved and supervises the payment of debts and distribution of assets.
The executor gathers and inventories all of the decedent’s assets. A valuation process might be necessary as well. Then, the executor uses the assets to pay any liabilities and distributes the remainder per the will’s instructions. The executor must also fill out and file any necessary tax documents, including the decedent’s last income tax return and any estate tax documents.
If a person dies without a will, the court will appoint an administrator to perform similar functions to an executor.
A probate lawyer in Virginia assists with the estate administration by guiding the executor through their duties. While being an executor may seem simple, it can take considerable time and work. Gathering and valuing assets can be complex, and the executor must periodically report their efforts to the court so the court can ensure the executor is carrying out their duties properly.
A probate lawyer will often help carry out the following duties:
Similar items may also need to be addressed through the trust administration process.
A probate attorney can help with these processes and requirements, taking much of the load off the executor. Having someone who has been through the Virginia probate process before and understands the necessary next steps can be invaluable, especially for grieving family members who must go through this process after losing a loved one.
Trust and estate litigation arises whenever there is a dispute about the estate. Proper estate planning and communication with loved ones can decrease the likelihood that a conflict will arise. However, family members or other loved ones sometimes challenge even the best-laid plans.
Trust and estate litigation might arise in any of the following situations:
Many other types of litigation can also arise because of how the estate is administered or the estate planning document itself. Conflict can arise if the specific requirements of a will or trust are unmet.
Having a trust litigation attorney assist with these disputes can be very helpful. An attorney will not only know Virginia’s requirements for trust documents, but they will also be able to work through the litigation process with family members or other interested parties.
Litigation can be highly complex, but estate disputes can be even more difficult because they often involve much emotion and family history. Personal relationships among beneficiaries, for example, can create emotionally charged disputes that can be very challenging to resolve. An experienced attorney who can be a rational sounding board can be invaluable in these cases.
Virginia state law has specific requirements for trusts and estates. The trust or will can be invalidated if it does not meet these requirements. Having an attorney help with this process will decrease the likelihood of having an invalid document.
In addition, an estate planning lawyer will help you craft estate planning documents that meet your specific needs. As part of comprehensive estate planning, additional estate planning tools recommended by legal counsel might include the following:
Unless you are well-versed in creating trusts or wills, you likely will not think to include everything you need in your estate planning documents. Having an attorney provide legal services to assist with this plan, from health care to tax savings, can result in valuable peace of mind.
Get help with your Virginia estate plan by contacting Montagna Law. Our team can help you create an estate plan that meets your needs. Our Hampton Roads law firm can also assist with trust litigation or will contests. Learn more by calling 757-622-8100 or using our online contact form.
*The consult fee is $50 for up to ½ hr phone consults and $100 for up to 1 hr in-person consults. These consult fees are then applied to the retainer if the client retains us within 30 days of the initial consult.
Jon Montagna received a Bachelor of Arts in Literature from American University in Washington D.C. and graduated Cum Laude from the University of Miami School of Law in 1999. Jon practices law in the Hampton Roads Virginia area.