by Sheryl Herndon, White & McCarthy Law
What’s mine is yours and what’s yours is mine, right? The answer is ... IT DEPENDS. Are you married? Do you have a valid will? Have you updated your beneficiary designations? Do you have a trust? Have you made gifts during your lifetime? How is your real estate titled? Do you have a marital agreement? Do you have a durable power of attorney? Do you have a marital agreement? Have you moved from another state?
Although few couples want to contemplate the “Big Ds”: Death, Disability and Divorce, estate planning is critical for everyone over the age of 18 – single, married, LGBT and straight. The law makes no accommodations in situations of disability or death for couples in a non-marital relationship and while married couples are entitled to certain legal rights and presumptions, these rights and presumptions should not be considered a substitute for a proper estate plan.
If you fail to plan, state law and courts will “make” your plan for you and it is a safe bet that the plan will be more expensive and more cumbersome that the one you would have implemented. It is also possible that the plan will be contrary to your intentions and wishes.
Health. An advance medical directive allows you to designate the specific individual(s) who you want to make your medical decisions if you are unable to make them. You can nominate a primary agent and designate a secondary agent who may serve if your primary agent is unable or unwilling to serve. An advance medical directive also allows you to specify your wishes regarding certain health situations, such as end of life treatment and organ donation and designate individuals with whom your agent must share information upon request.
If you are incapable of making informed health care decisions due to an accident or illness and have not executed an advance medical directive, the law defines who may provide consent for your doctor to provide or withhold health care. Under current Virginia law, the order of decision makers, in descending order, as follows: (i) a guardian, (ii) if there is not guardian, a spouse, (iii) if there is no spouse, an adult child, (iv) if there is no adult child, a parent, and (iv) if there is not parent, an adult sibling, and then, (v) any other blood relative in descending order. If there is more than one individual in the same class (such as two children), the majority of reasonable available members of that class control the decision.
Finances. A general durable power of attorney allows you to designate a trusted friend, family member or attorney to manage your financial and legal matters if you are unable to do so. You can nominate a primary agent and designate a secondary agent who may serve if your primary agent is unable or unwilling to serve. You may specify when the agent may act, the extent of his or her authority, and identify individuals to whom your agent must disclose his or her actions.
Although the law provides “default” health care decision makers, there are no statutory provisions which authorize an individual to manage your finances and legal matters if you are unable to do so. Without proper legal documents, authority can only be obtained pursuant to a court finding that you are incapacitated and enter an order appointing a Conservator to manage your assets. This process is expensive and cumbersome; there can be considerable delay between the incapacity and the entry of a court order; and the results may be very different from what you intended.
Some of the most important benefits of wills and trusts are that they allow you to state your wishes regarding what happens at your death. Proper estate planning documents allow you to designate who should serve as the guardian of your minor children, who will administer your estate, who will (and who won’t) receive assets, the manner in which those assets are to be distributed at your death, and whether. Pursuant to either a will or a trust, you can direct that assets be held in trust for beneficiaries until they reach a certain age or status, protect a beneficiary’s eligibility for public benefits, designate who will control funds while they are held in trust and, make provisions for charitable beneficiaries. If it is important for your estate plan to remain private, you can create a revocable trust. Since a revocable trust is generally not filed with the court and does not become public record, the nature and value of your assets, the identify of your beneficiaries, the amount that beneficiaries receive, and conditions regarding distribution are kept private.
Absent a valid will or trust, the law directs who will administer your estate and who will receive your assets upon your death. Laws regarding the distribution of your assets vary among states. In Virginia, if you are legally married and die without a will, your spouse receives the entirety of your estate, unless you are survived by children (or their descendants) who are not children of your surviving spouse, in which case, your surviving spouse receives one-third of your estate and your children (or their descendants) receive two-thirds of your estate.
If you have no surviving spouse at your death, your estate passes to your children and their descendants. If you have no spouse and no children (or descendants), your assets pass to your parents, or the survivor of them; or if there are none, your assets pass to your brothers and sisters and their descendants; and if there are none the Virginia Code defines the individuals to whom your estate descends and passes. If there is no other heir or distribute of the decedent’s real or personal estate, it escheats to the Commonwealth of Virginia.
Proper planning with an estate planning attorney can help you determine the best way to ensure that you, your assets and your beneficiaries are protected and that your wishes regarding your medical care, finances and estate are honored.