A Will (also known as a Last Will and Testament) is a document that specifies how you want your possessions (things) and property to be distributed when you die. The will also designate the personal representative who is in charge of administering the person’s estate. This person will also get sworn in with the probate court and be responsible for filing the appropriate documentation during the probate process. Additionally, a will is used to designate the guardian for minor children.
Wills are great for young people starting out or older people who have devasted themselves of their real property.
Upon your death, your will becomes a public document along with all of the accompanying filings. Anyone can look and see what you owned at the time of your death that is going through probate. If you do not want your relatives to know what you have do not use a will.
The original must be available to probate. A copy will not suffice. Sometimes attorneys will keep the original will as a courtesy to you. Unfortunately, if an attorney goes out of business and they do not always send the original will back to you before that happens. We have had many clients tell us they do not have their original will and when we try to help them get it we find that it is impossible. It is best that you be responsible for the safekeeping of your original will.
In Virginia, wills are both witnessed and notarized. That is called a self-proving affidavit. It means that when the will is brought to probate court the personal representative does not need to get one of the witnesses to attest to see you sign the will. Not every state does this. It is important to know if you move to Virginia you might want to re-execute your will using two witnesses and a notary. If a will is very old sometimes it is hard to find a witness to attest to seeing you sign the will.
All wills go through probate. Probate is a court-supervised proceeding through which a decedent’s assets are assembled, debts are paid off, and remaining assets are distributed according to the terms in the will. Probate is time-consuming and expensive, often taking 18-24 months in Northern Virginia and costing thousands of dollars in filing fees. The accounting can be confusing. It is often cheaper to have an attorney help you from the beginning of the probate process then start in the middle. If we start in the middle sometimes we need to go back and correct mistakes.
Most families find probate to be a hassle that is best avoided. It’s even possible to have probate in more than one state. On top of that, the proceeds from real property, i.e., a family home may not available to distribute until the probate has been open for 12 months.
Revocable Living Trusts
The two primary advantages of a revocable trust are that a trust starts to work the day it is signed and a trust does not go through probate.
A Revocable Trust is based on the law of contracts. A trust provides guidelines for how somebody (the Trustee) is supposed to manage assets while an individual is alive and healthy, in the event of incapacity and after death. Typically, you are the Trustee of your own trust. You choose a successor Trustee to take over in the event of your incapacity or death.
For all intents and purposes, you and the trust are the same. The Trust uses your social security number. Your tax rate does not change. You do not pay a higher property tax. You have complete control over all of your assets. You can sell your assets you can move assets in and out of your trust at will.
A Trust works by taking title to the owners’ assets. Instead of owning a house in the name of Thomas and Susan Smith, the title would be Thomas Smith and Susan Smith Trustees of the Smith Revocable Trust Dated when you become our client.
Benefits of a Revocable Trust
A revocable trust avoids probate and allows the trustee to quickly administer the estate to the beneficiaries. A trust-based estate plan protects the inheritance of a loved one by giving the trustee the option to postpone the distribution. It is useful to protect a beneficiary’s assets from creditors who might go after children’s money or in case of a child going through a divorce. The soon to be ex cannot make a claim on your child’s inheritance as long as the money stays in trust.
Married couples can use a joint revocable trust saving them from having to split marital assets to fund two separate trusts. This type of planning also avoids retitling after the death of the first spouse. Most importantly it allows for maximum flexibility to tax plan if necessary. Additionally, a trust can hold assets from multiple states.
Many clients come to our firm unhappy with their first trust-based plan because the attorney wrote two separate trusts and had the couple split up all of their assets. Longtime married couples do not want to do that. We are always pleased to tell our clients that they can have a joint trust in Virginia. The attorneys at DBL can assist you with drafting a joint trust.