JGB September 2024 Newsletter
One frequently asked question I receive as an estate planning attorney is “What estate planning documents do I need?” Truthfully, the answer to that question depends on the goals the client hopes to accomplish. Although the question seems simple at first blush, it does not get to the heart of the issue. When people ask questions like “What estate planning documents do I need?” they are really asking one of two questions: (1) “What is the bare minimum that I need to have prepared?” or (2) “What is the bare minimum to ensure that my estate is fully covered?” This newsletter will discuss both of those questions.
“What Is the Bare Minimum That I Need to Have Prepared?”
For those wondering what the bare minimum they need to have prepared, the answer is relatively simple. At its most basic level, a testamentary device (like a Will or a Trust) is necessary to ensure that your assets pass to your intended beneficiaries. In addition to naming beneficiaries, these documents designate the parties who are responsible for going through the administrative functions of the probate process or managing the Trust after you pass away. Without preparing a Will or a Trust, the Clerk of the Court appoints a Personal Representative you did not choose to usher your assets through probate; at the end of which, your assets are divided according to the law of your state. While Virginia’s idea of the division of assets makes sense for some, it doesn’t for others. To learn more about Virginia’s default laws of intestacy, please refer to Va. Code § 64.2-200, which establishes the order in which assets are divided when someone dies without a Will or a Trust.
“What Is the Bare Minimum to Ensure That My Estate if Fully Covered?”
The bare minimum a person needs to ensure that they are fully covered in life and at their death is a Will or a Trust, a Durable Financial Power of Attorney, and an Advance Medical Directive.
As explained above, a Will or a Trust is important for determining your beneficiaries and who is in charge in the event of your passing. This is especially important in the case of blended families, or complex family dynamics. For example, if you have an estranged family member, like a child, it can be important to create a Will or a Trust to ensure that the child is not provided for, or to reduce or control their distribution. Conversely, if there is a non family member who you treat like family, they would not be provided for at the default level. Estate planning attorneys commonly hear clients say that their estate is “simple,” but it is uncommon for any family to perfectly fit the mold Virginia’s default intestacy distribution laws.
The Durable Financial Power of Attorney is a legal and financial decision-making document that appoints agents to make decisions for you if you cannot make them for yourself. These documents are useful for when you are alive but incapacitated. However, not all Durable Financial Power of Attorney documents are created equal. Financial institutions have the discretion to reject these documents, so creating a power of attorney that specifically enumerates every power your agent can perform ensures that banks will feel comfortable working with your agents.
The Advance Medical Directive (AMD) combines three distinct documents: a HIPAA Release, a Healthcare Power of Attorney, and a Living Will. Be advised, not all Advanced Medical Directives contain a HIPAA release form; however, JGB AMDs do contain this necessary element. With a HIPAA Release, you can designate individuals who are eligible to receive pertinent medical information directly from a physician on your behalf. So, if you are injured in an accident, your agents can call the hospital and speak with the doctor to inquire about your medical situation. The Healthcare Power of Attorney is a medical decision-making document that allows your agents to make decisions for you if you cannot make them yourself. For example, if you were unconscious and in need of a surgical operation, your agent would be able to consent to that surgery on your behalf. The final medical document is the Living Will. The Living Will states that if you are in a terminal and irreversible state, and a physician concludes that you will not recover, your agents have the authority and discretion to remove and/or refuse medical devices and treatments that would only artificially prolonging your life, such as dialysis or ventilators.
JGB encourages all prospective clients to schedule a complimentary meeting to discuss their estate plans. In these individualized meetings, your JGB attorney reviews your assets and family dynamics to help you determine which plan is right for you. If you would like to schedule an appointment, please call our office and speak to one of our staff members to be scheduled.
About the Author: Matthew Allocca is a graduate of the University of Mary Washington where he earned his B.A. in English Literature, specializing in Victorian-era novels. While at UMW, Matthew was active with his school’s club lacrosse team and campus radio station. Following his college graduation, Matthew spent time interning in the library at the Virginia Supreme Court. Matthew’s time spent interning was integral to his decision to pursue his J.D. Matthew attended the University of Richmond School of Law, where he focused his curriculum on Estate Planning and Tax law. Matthew took the Virginia Bar Exam and has been a practicing attorney since October 2023.Outside of work, Matthew is passionate about motorsports, particularly Formula 1 and NASCAR, fly fishing, and spending time with his soon-to-be wife, Lisa.