Estate planning is perhaps the most important and simultaneously the most procrastinated family planning task. Understandably, people don’t want to think about their mortality, but after all the work you put into saving money for your retirement or passing on to your descendants, not having a plan in place can result in turmoil if you pass away.
Here are a few tips to get the process going.
Prepare a will
Fewer than half of adults in the U.S. have a will. People often don’t bother with a will because they think their savings and assets are just too small to matter. But after you make a list of your assets (see below), you may be surprised at how much you actually have. Even a basic will can make life easier for your family when it comes time to distribute your estate.
If you don’t have a will
Virginia’s intestate succession laws will kick in if you pass away without a will. These are predetermined, inflexible rules about estate distribution. They do not consider broken relationships, estranged family members, ex-spouses and other complicated family dynamics. Assets may be distributed in a way the deceased may not have liked.
Again, preparing a will can eliminate any possible problems.
A living will
Second in importance only to your will is your living will. This document contains your wishes if you become incapable of caring for yourself. This isn’t just for people nearing the end of their lives. An incapacitating accident or illness can occur at any time.
Included in this document will be your power of attorney and details of medical efforts you want, or don’t want, to be performed to keep you alive under various circumstances.
Listing all of your assets
It’s best to begin the estate planning process by listing your assets. Items may include:
- Bank accounts
- Retirement accounts
- 401k accounts
- Life insurance
- Luxury items
- Digital assets (cryptocurrency, websites, hard drives)
- Intellectual property
- Storage units
Estate and inheritance taxes
If you or your loved one is a Virginia resident, you’ll be happy to hear that the state does not have estate or inheritance taxes.
There is a federal estate tax, but it only applies to estates with a value of more than $12.06 million.
Have your will reviewed
An attorney can draw up your will for a flat fee. If your estate is modest, you may choose to do this work yourself, but when you have completed your will, or even just an outline, have an attorney review it for potential legal snags. Again, your family will be thankful that you did.