There are a lot of misconceptions about Estate Planning. Many people think that you have to have a large value of assets or a lot of land to benefit from estate planning. And many people think that they only need a simple will because they don’t have enough assets. But the truth is, almost everyone can benefit from having an Estate Plan.
So why do you need an Estate Plan? Some of the main concerns people have about the assets and loved ones you leave behind are who will make sure all of your belongings, property, and other assets are divided up as you wish, who will care for minor children, and who will take care of you if you are incapable of making your own decisions. If these things, among others, aren’t addressed before you pass on, it can create a headache for your loved ones, during an already stressful time in their lives.
Who Will Take Care of Your Estate ("Executor")
Family dynamics can be complicated, and they can cause unnecessary expenses and time delays to the administration of your estate. Many times, people are best choosing either an independent representative or a family member that is a little bit removed (such as an aunt or uncle or in some cases even a sibling) rather than a child as the executor. If you have only one child, that may be a fine decision. However, if you have more than one child, not only is your child dealing with the loss of a parent or parents, but now one of them may feel slighted that they were not chosen as the executor.
Who Will Take Care of Your Children ("Guardian")
Although there may still be requirements for a proceeding so the guardians may be appointed by the court, a will can designate who you want to care for your children in the event that both parents are no longer around to care for them. If one parent is still alive, the default is that the surviving parents cares for the child(ren). You can even specify if you want visitation with any family members, if you want them to be raised in a certain religion, and any other aspects of raising your children that are important for your chosen guardian(s) to carryout.
Do You Want to Give Specific Gifts to One or More People
The best way to handle specific gifts to family members or friends, is to discuss what means the most to each of them and make a detailed list of what items you want each person to have (and where that item is located) after your passing. You also want to consider whether the gift should constitute part of the value of the remainder of your estate that they are entitled to based on additional provisions in your will. This list should be included with your will and other estate planning documents. Once you have a will in place that allows you to specify what items you want to gift to whom, you may change these gifts at any time with a new list that you sign and date.
Do You Need a Trust
This may be one of the most difficult questions to answer, and it requires a great deal of thought on your part about your goals for children or others that may be financially dependent on you. There are several options for a trust such as a Testamentary Trust (a Trust within a Will) or a Revocable Living Trust (which is a separate document). The Revocable Living Trust offers greater protections for your beneficiaries (such as children or grandchildren) and a greater opportunity for you to specifically state what the money or other assets should be used for. However, at a minimum, if you have minor children, you want to have a Testamentary Trust so that you can appoint someone to handle the money for your minor child(ren) when you are gone.
Additional Documents in Your Estate Plan
Power of Attorney, Advanced Medical Directive/Living Will, Medical Power of Attorney, etc.
The most common additional documents are a Durable Power of Attorney, a Medical Power of Attorney, and an Advanced Medical Directive (or Living Will). These documents clearly state who should handle your finances and your medical decisions, as well as outlining any financial or medical decisions you have already made for yourself. This all but eliminates uncertainty as to the financial needs and medical care you would like your loved ones to carryout on your behalf. These documents do overlap a bit, but if you opt to forego one or more of them, it may leave your loved ones with an incomplete picture of what you wanted.
Hammelman Law, PLLC handles estate planning and business law matters in Northern Virginia and Maryland. In Virginia we are given the title of Attorney and Counselor at Law. Melanie takes not only the title of Attorney seriously, but the title of Counselor at Law, as well. Melanie provides her clients with advice and counseling as to the best options for an estate plan, given the specific family situation and ultimate desire for asset distribution, all at affordable rates.