Virginia residents who have amassed significant wealth often want to save their assets in order to pass them on to their loved ones and future generations to come. However, estate taxes may inhibit some people's plans, and some options may help people minimize their tax burden. As part of the 2017 tax reform bill, a massive increase in the estate tax exemption went into effect. As of 2020, the exemption has reached $11.58 million per person and double for married couples.
When Virginia residents think about the future, they may want to make plans for how their assets will be distributed after they pass away. By preparing a will or creating a trust, people can plan to leave their property to their loved ones. If people do not have a will, their belongings will be distributed in accordance with the state's intestacy law. In an attempt to save money while creating an estate plan, some people may rely on forms in order to make a will on their own.
Virginia residents may want to consider using trust protectors as part of their estate planning. Trust protectors can take over a trust if it is in peril from lawsuits, creditors or a soon-to-be-ex-spouse.
Trusts have become a popular option for many people in Virginia who want to plan for the future. They offer a greater level of privacy, flexibility and control than a traditional will while allowing assets to pass to beneficiaries without going through the probate process. When people create trusts, they often remain in control of them throughout their lives or at least until they become incapacitated. In most cases, people will name a successor trustee to manage the assets after they pass away or if they are no longer able to do so themselves. Similar to people who learn that they are the executor of a loved one's will, people who learn that they are a successor trustee are often unsure of their next steps.
Estate planning can be important for people in Virginia who want to make sure that their assets pass on to their heirs in the manner they choose. By making an estate plan, people can allocate their property and also help to avoid future conflict and delays among their family members. There are several types of documents that can be an important part of an overall plan, including wills and trusts. Wills are perhaps the best-known estate document, a written testament that directs how a person's property should be disbursed after they pass away. It goes into effect after the person dies and, in most cases, passes through the probate court system.
Most people who have never had any experience with estate planning or caring for a sick loved one do not realize that there are multiple types of powers of attorney. Each has its own purpose and rules regarding when it goes into effect, what powers it gives the agent, and when or if it can be revoked.
People are busy. A Virginia resident may juggle many responsibilities as they fight to get to the end of each day. Between holding down a career, taking care of their kids and spouse, managing their home, and handling dozens of other transient tasks they may easily put off important matters that are not pressing or in need of their immediate help.
It is a commonly held belief that when a person passes on that their spouse will inherit their wealth and property. If that person dies without a spouse and has children, then those individuals will be given their deceased parent's money and assets. Where and how a Virginia resident's end of life estate goes once they have passed on can be managed through the creation of an estate plan. However, those who do not create formal plans for the disposition of their assets will have the laws of intestacy apply.
It is important that Virginia residents understand the importance of creating estate plans that meet their needs and fulfill their testamentary desires. One of the most foundational estate planning documents that individuals may choose to execute is a will. To legally create a will in Virginia, a person must meet several important requirements, one of which is to be of "sound mind."
Virginia residents should execute wills and other estate planning documents. That is because these testamentary tools may be used to distribute their estates and wealth according to their own intentions after they pass away. Without estate plans, an individual's assets will be given out according to a state's intestacy laws, which may run contrary to the decedent's wishes.