For many Virginia residents who realize the importance of creating an estate plan, getting started is often the most difficult step. The reluctance to face the harsh reality of one’s ultimate death is certainly a factor, but there are other considerations as well. One is the lack of clarity on the purpose of the various legal documents that may be utilized in an estate plan and how they work in conjunction to protect the creator’s interests. As with other complex tasks, it is a good idea to break things down to individual components and start at the beginning.
Financial planning analysts recommend a natural starting point is to consider who will inherit the estate assets. It is not necessary to determine who gets what at this point, only the individuals who will be beneficiaries. One consideration to keep in mind is that financial accounts typically have beneficiary designations, and these operate as a matter of law immediately at the time of death and supersede any contrary instructions in a will or trust.
A will is a good, basic estate planning document to have. It can indicate final arrangements to be carried out, name a guardian for minor children and name beneficiaries. A trust can also name beneficiaries, often without the requirement for opening probate, which can be a costly and time-consuming procedure. Additionally, powers of attorney for health care and finances can name others to act during periods of incapacitation and ensure end-of-life decisions are carried out as desired.
Once an estate plan is executed, it should be reviewed after any major life changes or at least every year. An estate planning lawyer can explain how a client’s interests both during life and thereafter can best be protected.
