As COVID-19 continues to spread throughout the United States, more Americans are facing new realities. Dealing with school closures, quarantines, and stay-at-home orders has impacted businesses and families in new ways. During times like this, more families are getting to their “to-do” lists that may have been lingering on their minds for some time. These times of uncertainty have also reminded many families of the importance of estate and financial planning.[/caption]
As the rate of infections increases, the chance of illness touching your family becomes a real possibility. Making sure everyone in your family is protected properly before anything happens is essential. This is the time to be sure your estate and financial plan are up to date and in line with your wishes, especially if you or anyone in your family is considered at “high-risk” for infection.
At a minimum, everyone should have in place a basic will, advance directive, and durable power of attorney. In addition to your essential documents, you should make sure all insurance policies and other beneficiary designations are up to date. On any account where you can name a “pay-on-death” or “transfer-on-death” beneficiary, you should make sure those designations are in place and up to date. Those designations will pass automatically upon your death, outside of your will and outside of probate. This type of transfer is ideal as it avoids any potential claims from creditors against the estate and creates a smooth transfer for your loved ones.
Your will can include specific gifts of personal property or other financial gifts, your funeral and burial wishes, and any guardianship preferences for minor children. The objective of any estate plan is to maximize the financial benefit for your beneficiaries while keeping the transition smooth and clear to all those involved. If your funeral and burial wishes are clear, there will be no question between your family and loved ones as to what you would have wanted.
Your advance medical directive allows you to choose an agent to make medical decisions on your behalf if you are temporarily or permanently incapacitated. In Virginia, your advance medical directive also includes your living will, which allows you to make decisions about life-sustaining treatments if you are ever in a terminal, unresponsive, condition. Although the decisions can be difficult to make now, it’s much easier on your family and loved ones if your wishes are clear and enforceable should the unthinkable ever happen.
Your durable power of attorney allows you to choose an agent to make financial decisions and engage in financial transactions on your behalf if you are unable to manage your own affairs. You can choose to have this authority only go into effect if you are incapacitated, which is referred to as a “springing” power of attorney. Otherwise, your power of attorney gives authority to act immediately as well as during incapacity.
In addition to the above documents, there are other ways to control distributions to your beneficiaries in a way that will maximize the financial benefits of your estate. For many families, one of their largest assets is their real estate, which ordinarily has to pass through probate after the owner’s death. Another option available in Virginia is the Transfer on Death Deed. This type of transfer does not create any interest in the property for the beneficiary during the owner’s life and may be revoked at any time. It allows the real estate to pass outside of the will and outside of probate to the chosen beneficiary, just like a life insurance policy or other financial account with a pay-on-death designation.
Another option for families with young children, or irresponsible adult children, is the revocable family trust. This option allows families to put assets into a vehicle, known as a trust, and control how distributions are made after their death. Beneficiaries may have certain expenses paid on their behalf and may receive distributions at certain ages or other intervals.
Melone Hatley is a family and estate firm serving Virginia Beach and Northern Virginia. Our philosophy is to provide all of our clients with the highest quality legal representation, innovative legal solutions, and unsurpassed dedication to customer service. Through our high standards, we strive to be a trusted resource to our clients.
We know from experience that a successful attorney-client relationship depends on our ability to understand your needs and objectives. For more information about estate planning, contact our Reston office today at 703.995.9900 or Virginia Beach at 757.296.0580 or visit our website: www.MeloneLawPC.com.