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Estate Law Practices
The Estate Law Practices can vary upon many different types.
As The Law Office of David G. Moss has listed a few but not all estate practices below.
Will
The most common and well-known estate planning tool is the will. Without a will a person dies intestate, which means the Code of Virginia determines which heirs are entitled to that person’s assets and how those assets will be distributed.
One problem that dying intestate can create for a person’s family is if they own real estate or have an interest in family land. When an individual dies intestate, their property passes according to the chain of succession found in Virginia Code Section 64.2-200. This means multiple family members can own one piece of property and depending on how each person wants to use the property, they may be forced to seek legal intervention and have the property divided in pieces or sold and the proceeds paid to each family member. This is known as a Partition Suit.
Wills can also help prevent family members from fighting over how an individual’s assets are divided amongst the heirs. Instead of leaving it up to the Courts or the Virginia Code, having a will allows that individual full control over which item goes to which person. A person may have items that they want to go to a certain person for a specific reason or no reason at all and having a will gives an individual the say in how their assets are distributed. This is the case even for the items like collections or artwork we refer to as tangible personal property or patents and trademarks, which we refer to as intellectual property.
By utilizing other estate planning tools, a person may not have many assets distributed by will, however it is still necessary to have a will to ensure that any property someone owns at the time of their passing is distributed to their heirs the way they want it to be distributed.
Having a will puts a person in full control of their assets including the decision of which person receives the assets and how their assets are split, if split at all.
Probate Process
When thinking about estate planning, many people think that they need to avoid probate. Probate is the process that an individual must go through in order to settle the estate if they have a will when they die. So, the phrase “avoid probate” generally means avoiding local taxes and other fees that are based on the value of the assets a person owns at the time of their death. Individuals can avoid or limit those fees by utilizing a variety of estate planning tools, some of which are outlined here.
The first step in the probate process is to offer the deceased’s will for probate at the Circuit Court Clerk’s Office in the County of the Decedent’s residence. Typically, this is done by the individual who has been named as the Executor. Although a will names a party as the “Executor,” that person must still qualify with the Clerk’s and can do so simultaneously to offering the will for probate. Challenges to the will offered for probate can occur, and if made, may have to be resolved through litigation in the Circuit Court. When anyone offers a will to probate, the Clerk for that jurisdiction determines if the paper presented is a duly executed will and meets all other questions of validity including that the paper is testamentary in character. Once that determination has been made and the document has been admitted to probate, the will is then recorded, giving notice to all individuals about the devise or disposal of real estate located in that jurisdiction.
Once an Executor qualifies as such, their responsibility is to administer the estate. The starting point for such task is to inventory the estate of the individual who passed away. This only involves assets or personal property that the deceased owned at the time of their passing. A Transfer on Death Deed is an example of property that someone owned up until they die, but immediately upon their death the title is transferred to their named beneficiary. This type of Deed divests the decedent’s estate of this property, and it would not be included in the probate process.
Two very important duties of an executor are to ensure proper distribution of assets to the individuals that were given them and to properly account for the administration of the estate. Sometimes ensuring a proper and equitable distribution as contemplated by an individual’s will may mean an executor can decide to sell assets of the estate to pay to certain beneficiaries. Importantly, the will must explicitly authorize the executor to do this.
To settle the estate, an executor goes through the Commissioner of Accounts with an accounting of the administration. The Commissioner of Accounts is tasked with supervising fiduciaries and settlement of accounts. A settlement of accounts, also known as a statement of accounts, is an actual document created by the executor to show what assets have come into their possession from the decedent’s estate and shows what they have done with them. Virginia Code Section 64.2-1304 details the time requirements for filing these statements. Depending on the value of the estate and if the requirements of Virginia Code Section 64.2-1302 are met, an inventory and settlement can be waived.
When the Commissioner of Accounts reviews the statement of accounts, they look to see what assets have been collected, if the debts, if any, have been paid, and how the assets have been distributed. Once reviewed and determined to be correct, the Commissioner of Accounts then files the statement with the Clerk’s Office. Depending on the assets and the size of the estate, this process can be quicker or long and drawn out.
Transfer on Death Deed
This type of deed is an instrument used to transfer legal title in real estate from the Grantor to a beneficiary, instantaneously and contemporaneously upon their death. This estate planning instrument helps limit the expenses that an estate will incur in probate, because legal title to the property never becomes an asset of the decedent’s estate. This means that when a will is put to record the value of the estate will not include the value of the transferred property, thereby reducing the local taxes the estate will ultimately be subject to.
Importantly, this instrument does not have any effect until the death of the grantor. This means the grantor can enjoy, improve, rent or even sell the property during their lifetime as they desire.
Another important benefit of using this type of instrument is that it is revocable prior to the grantor’s death. This allows a party to change their mind as to the ultimate beneficiary of the property is prior to their passing. To do so, a person simply files a Deed of Revocation with the Circuit Court. This would revoke the prior transfer on death deed.
Lastly, like other deeds, this instrument allows a party to transfer upon their death the property to one or more individuals. The type and form of the transfer all depends on how an individual wishes for the property to pass.
Durable Power of Attorney
A Power of Attorney is a document that gives someone else the ability to conduct an individual’s financial affairs on their behalf. This could include paying bills from their account, selling property, and handling other financial matters. A Power of Attorney can be drafted in several ways, depending on what financial transactions a party intends to authorize another to enter into on their behalf. A simple Power of Attorney is a document that authorizes a person to act in the appointed capacity from the date that the document is signed and such authority ends if the authorizing person becomes incapacitated. A Durable Power of Attorney lasts after incapacitation. This ensures that no matter what state a person is in, someone can handle those approved financial transactions. A Power of Attorney can also either begin from the execution of the document or after a certain event, such as incapacitation. Importantly, this means that the designated agent could not act on behalf of an individual until the event occurs. And having this document in place prior to a determination that an individual is incapacitated, allows such designated to act immediately rather than having to go through the alternative process of Petitioning the Circuit Court for guardianship and conservatorship.
Advance Medical Directive
Advance Medical Directives designate agents to act on behalf of an individual in medical situations when a person is incapable of making informed decisions regarding their medical for themselves. It also gives an individual the opportunity to express to their family and physicians what their wishes are for certain medical situations that arise. The most commonly known situation is refusing further treatment or withdrawing treatment when physicians determine that an individual has no brain activity and is on life support simply prolonging the dying process. An individual can designate what their wishes are through this document, whatever those wishes might be.
Not only does an Advance Medical Directive provide individuals with the ability to state their wishes if they are unable to do so themselves, it also gives an agent the power to make other health care decisions such as the ability to request and receive information from medical providers, and to authorize admissions or discharges, including transfers) from different medical facilities.