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Who Needs a Will

The answer is --- you do! Tax planning is not the only reason to have a Will. Accomplishing your objectives and controlling the distribution of your estate are the primary reasons to have a current Will. Your Will does things that no other estate planning document can do. You get to name the Executor you want to handle the administration of your estate. You get to designate who gets the items of tangible personal property you own at your death. You get to select the Guardian who will look after your minor children. Without a Will, your probate estate is distributed according to intestacy statutes. Partners, individuals living together, boyfriend and girlfriend, are not included in the intestacy statute and would be entirely excluded from taking any portion of your probate estate. Families with young children often use a Will to name the guardians for their children and to provide guidance for a Testamentary Trust (a trust created in your Will) for the benefit of the minors. Your Will is the road map for the distribution of your assets to your intended beneficiaries and you owe it to them to provide clear guidance and a fair plan. For more on this topic please read the full article.....[link or whatever is appropriate].

The individual unified credit is now[1] $5,000,000.00 per person, so is a Will needed?

The answer is --- Yes! Tax planning is not the only reason to have a Will. Accomplishing your objectives and controlling your distribution plan are the primary reasons to have a current Will.

Your Will allows you to provide for the distribution of your individually held assets according to your plan. Assets you own jointly with others or those which are titled with one or more other owners and include the phrase "with rights of survivorship" or similar language are not distributed pursuant to your Will but rather pass to the surviving owners by operation of law. If you don't have a Will, your individually owned assets pass to your heirs-at-law according to state law, more specifically state intestacy statutes. Contrary to popular belief, if a person dies without a Will the state does not take a share of the estate. The intestacy statutes require a definitive scheme of distribution to your heirs and deliver your probate estate to those with the closet family relationship to you. While reliable and predictable, this scheme may not be your plan!

The unintended impact of the intestacy statutes become even more substantial if an individual is remarried and/or has children from a prior marriage. Not only are assets potentially not delivered according to the deceased individual's objectives, but often the resulting distribution requirements lead to unintended and expensive administrative burdens. Additionally, the intestacy statutes do not take into account relationships between those who are not married or blood descendents. Domestic partners, individuals living together, boyfriend and girlfriend, are not categories of relationships that are recognized in the intestacy statutes. If you want anyone in those categories to take from your estate, you need to provide specific written Will instructions to accomplish your objectives.

Wills are a simple method by which to transfer real property, tangible property, investments and money according to your direction. A well written Will also allows for flexibility and provides for solutions within the document, especially when loved ones you have included as beneficiaries die before you do. No one can truly predict what may happen in the future, and a lawyer can help you understand your options even when changes to your original distribution plan occur.

Families with young children often use a Will to name the guardians for their children. In addition, Wills that include minor children as possible beneficiaries will often include a Testamentary Trust (a trust created in your will) for the benefit of the minors so that the assets they inherit can be safeguarded and managed for them by a responsible adult (your named trustee) until they are more mature. Often the testamentary trust will delay (using age requirements or a period of time passing) or condition distributions to follow the logical decision stream of the adult parents. If you don't have a testamentary trust and your beneficiaries are under age 18, the courts will appoint your guardians and the trustees for your children's assets and require them to inventory all assets and account for the day-to-day management of those assets.

A proper and complete Will should answer the questions of how, when, and to whom distributions should be made. When written comprehensively, your Will should be a flexible document that allows for minor changes without requiring a complete overhaul. But when changes are required, a Will is easily modifiable either by an Amendment, called a Codicil, or by a complete replacement, something that has become much easier in the age of computers! Your Will also appoints the Executor (the person responsible for collecting and distributing your assets) who administers your plan as supervised by the court. If you have included a testamentary trust, the trustee (the person responsible for administering your testamentary trust) will ensure that your assets are received by the trust, invested, and then distributed according to your distribution objectives and timetable as established in the Will. Distributions to family, friends, charities, educational institutions, and others should all be included in your Will or related estate planning document. A "Letter of Instruction" is a convenient method of providing specific guidance on the distribution of tangible personal property in Virginia. The more clarity you provide in your Will the better. It is the absence of such a comprehensive plan that frequently leads to litigation and disputes over who should actually receive your assets.

This is an important task. Take the time to explore your alternatives and make a sound and comprehensive distribution plan today. A Will is your road map for the distribution of your assets to your intended beneficiaries. Wills are still vitally important. Even though the recent change to our Federal Estate Tax law (on December 17, 2010) raised the individual exemption to $5,000,000.00 per person that exemption is only valid for 2 years, and Congress can change it again if they choose to do so. Your attorney can help you understand how to make the best use of any personal exemptions that Congress allows in the years ahead. This isn't a "do it yourself" kind of subject!

Please contact the estate planning attorneys of Hale Ball today to schedule an appointment to prepare a new Will or to review and refresh your current Will. We look forward to serving you and your families.


[1] For tax years 2011 and 2012.

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