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.
Virginia residents and others may put off creating an estate plan for various reasons. However, it is generally a good idea to put one into place before getting sick of experiencing other significant life events. Significant life events include the birth of a child or grandchild or getting a divorce. In some cases, a child or grandchild will get divorced, which can result in a blended family.
Virginia residents are sometimes confused by the amount of paperwork that can be included in an estate plan, and their bewilderment sometimes grows when they find out that some of these documents have names that sound alike. It would be reasonable to assume that living wills and living trusts are broadly similar, but that is not the case. While their names may sound the same, the two documents actually serve very different purposes.
When developing their estate plans, Virginia residents can structure a trust so that it can be used to achieve their specific goals. It can be also structured to simultaneously give the trustee the tools needed to achieve those goals while dealing with ongoing economic and investment factors. In order to properly structure their trust, individuals have to decide if they will fund it straightaway, over a certain period of time or upon their death.
Virginia residents should consider using a trust in their estate plans for a number of reasons. A trust is a legal tool that can be used to protect assets against instances of incompetency, avoid the lengthy and expensive probate process and protect heirs. The expenses associated with establishing a trust vary and can cost as much as several thousand dollars.
For some single parents of minor children in Virginia, the other parent may still be a part of the child's life and may be the best choice for the child to live with if the custodial parent dies. However, single parents should still consider appointing alternate guardians in case the other parent cannot step into this position for some reason. This can be done as part of an overall estate plan.
Many people in Virginia feel uncomfortable with estate planning for an array of reasons. It makes people think about their own death, and it can also bring up difficult family relationships. Some people may have superstitions about how thinking about death can bring it on. Of course, the process can also involve challenging decisions about the financial future. Still, making an estate plan is an important part of planning successfully for the future.
People starting new jobs in Virginia are often given a bunch of forms to fill out. Some of these forms require naming beneficiaries for such things as life insurance programs, stock options and retirement savings plans. Most people fill out these forms and forget them. Unfortunately, this could lead to potential problems in the future.
When creating an estate plan, it can be easy for people in Virginia and elsewhere to overlook digital assets. Traditionally, estate planning is not set up to accommodate the newer existence of online accounts, and best practices for online security say passwords should never be shared. However, estate administrators or family members may need access. The problem is not just one of personal finances either. After the sudden death of the owner of a cryptocurrency exchange in December, it was revealed that the password had not been shared. The clients, who have a total of $190 million in investments, may never recover their cryptocurrency.