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Selecting someone you trust to be an executor of your Will is an important decision. Being an executor means dealing with significant responsibilities at a time when that person is experiencing the stress and grief of a meaningful loss.
Preparing your future executor to do this sometimes-challenging job with confidence and ease is as important of a step in estate planning as drafting your Will. Here are five steps you can take now to make your executor’s job easier when the time comes.
In addition to a Will, an executor will need to know where to locate certain critical information for you at the time of your death, including a summary of your financial accounts, credit cards or other liabilities, whether you have any life insurance or annuities that need to be dealt with, if you have any prepaid funeral or other arrangements/wishes regarding the disposition of your body, and, to some extent, if possible, a way to access funds to cover any final expenses like additional funeral costs or medical bills pending qualification to administer your Will.
By planning ahead, you can let your executor know where they can find important documents and how to access your records and accounts. You can also set up a way for them to easily access funds so they don’t have to use their own money to cover unexpected costs. Additionally, details can change before you pass that might require you to revise your Will. Keep your executor involved by regularly updating them throughout the process.
Make sure that they will have access to your home after you die and be able to secure your belongings in order to do their job.
Get your documents in order
Even the best-written documents can cause confusion. Review these documents with your executor so there’s no second-guessing your wishes and they can ask questions about your instructions or assets. Make sure they understand what’s passing through your Will and what’s passing to directly named beneficiaries outside your Will, along with contact information for your beneficiaries.
As the executor proceeds to carry out your final wishes, they may need more information, like your financial or personal documents. As you prepare your Will, you can gather and store these documents in a binder where they’re easily accessible.
Here are several important documents to prepare now to make your executor’s duties easier:
- Birth and/or death certificates. In addition to your own birth certificate, this includes the birth certificates of minors or dependents involved in the Will. These documents can be crucial for the executor to gain access to your assets.
- Marriage licenses and/or divorce certificates. Any current or past significant other may be involved in your Will’s execution. These documents can clear up potential misunderstandings or disputes.
- Deeds and titles to property. Property may include personal or commercial real estate as well as vehicles.
- Mortgage information. Include the details of any debts, including mortgages.
- Insurance policy information. Include your life insurance policy’s details as well as a list of beneficiaries.
- List of all bank accounts. In addition to the account number and the name of the bank or credit union, include online access information if available.
- Investment portfolios. Provide your policy information, the name of the institutions, designated beneficiaries, account numbers, and account information to access your investments.
- Funeral plans and burial plot information. Decide on your cremation or burial preference so your executor doesn’t have to make the difficult decision for you.
- Contact information for your professional advisors. Even when you’re well prepared, your executor will likely still have questions or need advice. Give your executor the contact information for the professional advisors overseeing your assets such as your lawyer, insurance agents, accountants, and/or financial advisors.
Update plans after significant life events
A Will is never set in stone until you’ve passed away. When you’re alive, treat your Will as a living document that updates and grows with you. Whenever you have a significant milestone, update the Will to reflect any changes in assets or updated information such as insurance policies or professional advisors. Common milestones include births, adoptions, marriages, divorces, or the death of any currently listed beneficiaries.
Organize your finances
When creating your estate plan, make notes of all your assets. When you pass, your executor will first need to use those assets to pay off any remaining debts and taxes.
Once all the debts and taxes are taken care of, the executor can distribute any remaining assets among your chosen beneficiaries. Make it easy for them to avoid disputes or arguments over who gets what by giving them the answer while you’re still around.
Work with an experienced attorney to draft your estate planning documents
There are many factors that go into setting up the executor of your Will for success. The Law Office of Patricia E. Tichenor has more than 20 years of experience in helping Virginia residents plan and prepare everything they need to make their executor’s duties go smoothly.
Set up a free consultation today to let us guide you through the process of ensuring that both you and your executor are prepared with all the resources you both need to carry out your final wishes.
Certain life events may warrant an update to your estate plan, such as changes to your marital status, family members, or your assets. It’s critical to review and update your Will and other estate planning documents after such a milestone; otherwise, your most up-to-date wishes may not be carried out if you pass away unexpectedly.
Here are six major life events that may require you to update your estate plan.
When you tie the knot, make sure your new spouse is added to your estate plan per your wishes (and considering the terms of any premarital/prenuptial agreement you may have signed), after your marriage. If applicable, you may want to add your new step-children to your estate plan as well.
However, you do not have to be legally married to rethink your estate plan. People in domestic partnerships can also add significant others to their estate plan at any time. Keep in mind that if you are not in a legally recognized marriage, your partner may not receive anything upon your death unless it is clearly laid out in your estate plan or you have named them as your pay-on-death or transfer-on-death beneficiary for all of your financial accounts and home (if applicable).
If you are recently separated or divorced, you should to remove your previous spouse from your Will or any payable-on-death accounts and update the beneficiary information to either your children, a friend, or another family member. More importantly, if for some reason you wish to maintain an ex-spouse as your beneficiary for any reason, you must sign a new set of estate planning documents that are dated after your date of divorce, because Virginia statutes provide that a divorce effectively disinherits your spouse on your older documents and also removes them as an executor or agent under a power of attorney.
If you are a parent of a minor child, it’s critical to have an estate plan that lays out exactly how you would like your children to be cared for if you pass before they turn 18 years old. This includes appointing a guardian if something were to happen to both you and your spouse or partner, or addressing what role you may want your new spouse as a step-parent to have in your child’s life if you predecease them.
If you’ve recently had a child, adopted a child, have a new grandchild, or want to add your step-children to your estate plan, write out your wishes clearly in your Will, including whether the new members of your family will become beneficiaries to parts or all of your estate.
4. Incapacitation or death of a major beneficiary
You should rethink your estate plan if a major beneficiary such as a spouse, child, parent, or sibling dies or becomes seriously injured or incapacitated. You may want to remove them from your Will and change your beneficiary information. Alternatively, you can change how much or how little the injured or incapacitated beneficiary will receive from your estate or, if you are their guardian, how they will be cared for after your death. This may include determining whether you need a Special Needs Trust for an incapacitated child or other adult family member. You’ll also need to change your Will if you had appointed the person as the sole executor of your estate and did not choose a backup.
5. A personal health decline
Review your estate plan if you have significant negative changes in your personal health, such as a debilitating accident or a major medical diagnosis. You may want to create or update your power of attorney documents to ensure an agent is appointed to make health or financial decisions for you in the case of incapacitation, cognitive decline, or coma. When choosing your agent, make sure you pick someone you can trust to act on your behalf, be an advocate for you, and keep your wishes in mind.
6. Significant changes in assets
If you’ve recently acquired more assets, such as through the inheritance of a parent’s estate or winning the lottery, you may need to make changes to your estate plan. The number of assets you own in total will affect how much your beneficiaries will receive so it’s essential that you specify these assets in your Will. This also goes for assets you no longer own that need to be removed or replaced.
Even if you’ve had no major life changes, it’s still a good idea to review your estate plans at least once every year or so to ensure it aligns with your current wishes. If you need help with this task, The Law Office of Patricia E. Tichenor, P.L.L.C., is here to help. Schedule your free virtual consultation with one of our experienced attorneys today.
It’s never too early to start creating an estate plan. Estate planning allows you to dictate what happens to your assets in the event of your death or incapacity. Planning ahead will ensure a smooth probate process for your loved ones and beneficiaries, or help them avoid probate altogether. Early estate planning will also give you peace of mind knowing your wishes are clearly documented if something were to happen unexpectedly.
To get started with your estate plan, follow these five steps.
1. Identify and record all your assets
Your assets include tangible and intangible items. Tangible assets are assets that can be measured physically, such as any furniture or furnishings or other items in your home, your car, or any work tools or equipment you own. Intangible assets are not physical and may include any business licenses, trademarks, digital (social media) assets, or intellectual property you have. Certain assets come with risks. For example, if you own a home and you have overdue mortgage payments and property taxes at the time of your death, your estate will need to have sufficient funds to settle those debts. Take a look at your asset list and consider what you can do to mitigate risks that could come from them.
2. Choose your agents
When estate planning, choose both a healthcare and financial agent to carry out your wishes once you cannot. These agents are typically named in a Power of Attorney (POA) document.
Appoint a healthcare agent — also known as a proxy or attorney-in-fact — in the power of attorney portion of your Durable Medical Power of Attorney or Advanced Medical Directive. Should you become incapacitated, your health proxy will make medical decisions on your behalf.
You can also select a separate financial agent who will oversee your mail, bills, property management, filing of tax returns, investments, safe deposit boxes, insurance, and more by creating a Durable General Power of Attorney (a.k.a “financial POA”). The person you choose will be required by law to act within your expectations to the best of their knowledge when you no longer can do so yourself.
Keep in mind that you can choose one agent to serve in both roles or appoint different people as your medical and financial proxies. Someone with a power of attorney is different from a conservator, who requires a public proceeding and the incapacitation of the estate owner to be appointed. Additionally, an executor is responsible for the estate once the owner has passed away, whereas someone with a power of attorney is no longer responsible for the estate once the owner dies.
3. Protect your loved ones and name your beneficiaries
If you are a parent with minor children, you’ll want to name a legal guardian who can take care of them in the event that you and your child’s other parent pass away simultaneously. You may also wish to set up a trust plan to provide for your children financially until they reach adulthood.
Next, consider what assets you want to pass on to your family and friends. Go down your list of assets one by one and decide on the beneficiaries of each item. Some individuals choose to leave their entire estate to one person while others divide their estate and leave assets to different heirs.
Lastly, learn how to avoid probate of your assets, which can best facilitate your long-term planning goals and avoid needless probate taxes and administrative paperwork burdens for your family.
4. Review local and federal estate tax laws
Virginia does not currently have an estate or inheritance tax for estates of any size, keeping in mind that inheritance taxes are imposed upon your beneficiaries (not your estate) and are entirely dependent on whether your beneficiaries reside in Virginia or elsewhere. If your beneficiaries do not reside in Virginia, it’s important to know whether the State in which they reside has an inheritance tax.
If you do have a particularly large estate, your executor may be responsible for paying federal estate taxes. To help ease the burden of these expenses, you or your attorney should review current federal estate tax laws to determine your estate’s liability. Generally, the estate tax is applied to estates larger than $12.92M per person as of January 1, 2023; or $25.84M per couple. The amount of inheritance tax pays depends on each estate and how much its value exceeds that upper limit.
5. Hire an estate planning attorney to help.
Due to the complexity of estate planning, it’s always wise to contact a professional for help. To get started with your estate plan or update your current plan, contact the Law Office of Patricia E. Tichenor, P.L.L.C. and schedule a free consultation. Our firm has over 20 years of experience helping Virginia families with creating and updating their estate plans.