WHAT IS A WILL?

A Will is a legal document which gives instructions as to how your assets will be distributed at your death and names the individuals who will be responsible for carrying out your directions.

WHO MAY MAKE A WILL?

Generally anyone over the age of 18 and “of sound” mind can make a Will. “Sound mind” means that the person making the Will is capable of understanding the purpose of a Will, knows what property he or she has, who are his or her  heirs, and how he or she wishes to dispose of property at death. An individual does not have to have a perfect memory to make a Will. Capacity is determined at the time the Will is signed.  Eccentric behavior, sickness, mental illness or even being subject to a conservatorship does not make someone incapable of making a Will.

WHAT HAPPENS IF I DO NOT HAVE A WILL?

If you do not have a Will then state statutes will decide who will receive your estate and this may not be what you want. If you have no apparent heirs and die without a Will, it is even possible the state may claim your estate.

WHAT IF I HAVE YOUNG CHILDREN?

In most cases, a surviving parent assumes the role of sole guardian.  However, it’s important to name a guardian for minor children in your Will in case neither you nor your spouse is able and willing to act. The guardian you choose should be over 18 and willing to assume the responsibility. If you do not name a guardian to care for your children, a judge will appoint one, and it may not be someone you would have chosen.

Your Will can also be used as a vehicle for establishing a trust for minor children. You can nominate individuals to serve as Trustee of your children’s Trust. Additionally, you can provide direction as to how funds are to be spent and when your children should receive their inheritance outright.

WHAT IS AN EXECUTOR (SOMETIMES CALLED PERSONAL REPRESENTATIVE OR ADMINISTRATOR)?

An Executor is the person who marshals your assets and oversees the distribution of your assets according to the terms of your Will.  When making a Will most people choose their spouse, partner, an adult child, a relative, a friend or professional to fulfill this duty. It should always be someone you trust and who is good at record-keeping and is very detail-oriented.

WHAT ARE THE DUTIES OF AN EXECUTOR OR ADMINISTRATOR?

The Executor’s duties include:

– Paying valid creditors and  taxes; – Notifying Social Security and other agencies and companies of your death; – Canceling credit cards, magazine subscriptions, etc.; – Filing  documents with the Court such as notices and accountings; – Filing the decedent’s final tax returns and any estate returns; and – Distributing assets according to the Will or state statute, if there is no Will.

WHEN SHOULD I UPDATE MY WILL?

You will probably need to update your Will several times during the course of your life. For example, a change in marital status, receipt of an inheritance, the birth of a child, death of a beneficiary, or a move to a new state, should all prompt a review of your Will. You can update your Will by amending it by way of a Codicil or by drawing up a new Will. Be sure to destroy the old Will after you sign a new one and remember not to update your Will by writing the changes on it. This may invalidate your Will and lead to court hearings.

WHERE SHOULD I KEEP MY WILL?

Once your Will is signed, it should be stored in a safe place that is accessible to others after you die. If the Will is placed in a safe deposit box and no one else has access, Virginia permits interested persons to access safe deposit boxes for the limited purpose of retrieving a Will and filing it with the Court.  Some Circuit Courts in Virginia will also accept Wills for safekeeping.  These Wills are not available to the public until filed for probate.  The cost is nominal.

Living Trust Q & A:

What Is A Living Trust?

A living trust is a type of contract. It is created during the lifetime of the grantor (the person establishing the trust), in which the trustee holds property for the benefit of one or more beneficiaries. In many instances the person setting up the trust is both the trustee and the beneficiary.

How Long Does A Trust Last?

A trust may be established for a short period of time or may continue after the death of the grantor.

Are There Different Types Of Living Trusts?

Yes, there are revocable living trusts in which the grantor sets up a trust during his lifetime but retains the right to revoke the trust, change its terms, or regain possession of the property in the trust. There are also irrevocable trusts in which the grantor sets up a trust during his lifetime but then gives up all right to revoke, amend, alter or terminate the trust. Revocable trusts are more commonly used.

Does a Revocable Trust Ever Become Irrevocable?

A revocable trust becomes irrevocable when the grantor dies or gives up all right to revoke, amend, alter, or terminate the trust.

In What Situations Is The Use Of A Trust Advisable?

There are many situations. For example:

• the grantor wishes to ensure adequate management and ease of transition if the grantor or someone else named in the trust is no longer able to manage his or her affairs;
• the grantor desires privacy in the handling and administration of the grantor’s assets during lifetime and at death;
• the grantor desires to avoid probate;
• the grantor owns property in other states and wishes to avoid additional probate proceedings in those states; and
• the grantor wishes someone else to accept management responsibility.

How Is A Revocable Living Trust Taxed?

For federal income tax purposes, all income is taxed to the grantor at the grantors tax rate since the grantor is considered the owner of the trust assets. When the grantor dies, the trustee will be responsible for filing income tax returns for the trust. No gift tax is required when the trust is created because the beneficiaries do not receive assets until the grantor dies. Very large estates might be subject to gift taxes after the grantor dies.

Do The Assets In A Revocable Living Trust Have To Be Used To Pay For My Nursing Home Care?

Yes. The assets are treated as if they belong to the grantor. However, if removed from the trust, there may be steps that can be taken to preserve them, especially for married couples.