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Estate Planning FAQs
What is an Estate Plan?
A typical estate plan includes three or four parts that designate people to act on your behalf in the event of disability or death.
- Healthcare Power of Attorney/Advance Medical Directive/Living Will: This document appoints someone to make healthcare decisions for you in the event you are disabled and cannot make them for yourself. This document also tells your treating medical providers how you want to be treated when you are incapacitated, including what to do in the event you are terminally ill. You can specify when this document comes into effect, and normally terminates upon revocation or your death.
- Financial Power of Attorney: This document appoints someone to make your financial and legal decisions for you in the event you are disabled and cannot make them for yourself. You can specify when this document comes into effect, and normally terminates upon revocation or your death.
- Last Will and Testament: This document serves several purposes. First, it indicates who will inherit from your estate upon your death. Second, it appoints someone to serve as your Executor or Personal Representative. This person will marshal all of your assets together during the probate process and will file any necessary accountings with the court before paying off debts and distributing your estate to your beneficiaries. Third, if you have minor children, it can be used to nominate who you would want to serve as the guardian of the person and property of your children in the event you pass prior to them turning 18. This document only comes into effect upon your death.
- Trusts: This document serves as a Will Substitute. Many people don’t realize that a Last Will and Testament is a public document. Anyone can go to the courthouse and pull a copy of your Will and accountings when your estate is probated. Also, the probate process can be long and drawn out, as you are waiting for the Court to approve your accountings and to allow you to distribute the estate assets to your beneficiaries. The benefit of doing a Trust in lieu of a Will is that a Trust is generally administered privately without any court intervention. You have the benefit of avoiding probate and any fees associated with that process. In addition, in certain cases it is necessary to have a trust to minimize or defer estate taxes and to provide for loved ones with special needs. Granted, for a Trust to work, you need to ensure that your real property is retitled in the name of the trust and that your financial accounts will pay to the trust upon your death. However, a Trust can save your loved ones a lot of difficulty in the long-run if you are willing to put the work in up front.
When do I need an Estate Plan?
While I encourage everyone to get an estate plan, it is especially important to do so if you have:
- A home or investment property
- A business
- A complicated family situation
- Family members with special needs
- Family heirlooms with sentimental value
- A diversified financial portfolio
- Minor Children
The reason why it is important to get an estate plan done in each of the aforementioned scenarios is that the state has default rules for who will inherit property from you or serve as guardian of your minor children. Most families won’t agree with the state’s default rules, which is why an estate plan would be necessary.
Why do I need an Estate Planning Lawyer?
Nowadays there are many Do-It-Yourself estate planning softwares and websites out there that can allow you to create an estate plan for minimal cost. Because of this, many people ask why hiring a lawyer is necessary. I typically give two reasons:
1. Estate planning is not one-size fits all
DIY estate plans are typically not properly tailored to the unique needs of each family. Often times these documents have a lot of clauses that are not only irrelevant to implementing your wishes, but are also difficult to understand without legal advice and counsel. While in certain circumstances DIY estate plans can be sufficient, they can create great inconvenience and expense for your loved ones if they are not properly structured.
Examples of instances where I typically see DIY estate planning failing to deliver include:
- Not properly providing for a child with special needs to preserve SSI/Medicaid and other government benefits,
- Not properly limiting access to funds for a beneficiary who has trouble managing money,
- Not properly creating a mechanism to defer estate tax on large estates,
- Not properly creating child’s trusts to help manage the funds of a minor, and
- Not properly funding trusts to ensure that you avoid probate.
Engaging an estate planning lawyer can help you create a plan that properly and clearly states what your wishes are, and that is properly aligned with your wishes for your family.
2. Estate planning is more than just producing a document
Many people devalue estate planning lawyers because they think that they are only paying for them to produce a document. However, estate planning involves a meticulous review of your assets and family situation to ensure that your wishes are properly put into effect. In many situations I have had to inform my clients that their DIY estate plans would not accomplish what they wished because their documents were either too ambiguous or were not legally enforceable. Also, in certain circumstances, the way they wrote up their estate plan inadvertently jeopardized their original intentions for their family members. Talking to an estate planning lawyer can help you produce an estate plan that is well-thought-out and that actually works.
Why is DeGioia Law, PLLC right for me?
We recognize that there are many excellent estate planning attorneys in the DMV. However, DeGioia Law, PLLC distinguishes itself in providing full-concierge legal services. Not only are we prompt and courteous in our service, but if you can’t come to us, we will come to you! If you reside in Virginia, Maryland, or the District of Columbia, contact us today to learn more about how we can serve you and your family!
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