Articles - Virginia Tax Lawyer


Myth #1: A standard estate plan exists

Estate plans are as diverse as the individuals creating them.  They are tailored to an individual’s personal and financial situations in order to achieve one’s goals.

Myth #2: Estate planning is drafting a Last Will and Testament

Estate planning employs various devices in order to achieve an individual’s objectives, such as inter vivos revocable trusts, irrevocable trusts, a Last Will and Testament (the “Will”), an advance medical directive, and power of attorney instruments.  Depending on the circumstances, a Will, which takes effect upon death and directs the transfer of assets in a manner set forth by the individual, may not be sufficient to carry out the desired estate planning goals of the individual without the utilization of other estate planning devices.  Given the ever‑increasing range of options available, it is important for an individual to recognize the limitations associated with relying exclusively on a Will, as well as the results that may be obtained through the use of alternative estate planning tools.

Myth #3: Estate planning is only for the wealthy

Estate planning can be beneficial even if an individual does not have assets in an amount which would require the filing of an estate tax return upon the death of the individual.  Estate planning may be necessary in order to ensure that one’s assets, no matter the value, are transferred to the intended beneficiaries after death.  In addition, estate planning may prevent familial discord which can arise after the death of a loved one in connection with disagreements over how the property of the decedent will be distributed among those entitled to receive such property.  Estate planning may also minimize the expenses associated with the estate administration process, and thereby preserve the value of the then existing estate.

Myth #4: Estate planning is not necessary if assets are jointly titled

Owning property which is titled jointly or jointly with right of survivorship may have unintended gift and estate tax consequences.  While joint ownership may resolve the issue of the disposition of assets upon the death of the first co-owner, the disposition of such assets upon the death of the surviving co-owner or upon the simultaneous death of the co-owners is not addressed by joint ownership alone.  For spouses with estate tax concerns, titling assets jointly (without implementing additional estate planning) may result in the failure to utilize the full amount which may be exempted from federal estate taxation upon the death of each spouse.  Although titling assets jointly or jointly with right of survivorship may be appropriate in some circumstances or as part of an overall estate plan, joint ownership alone might not be sufficient to achieve all of one’s estate planning goals.

In addition, titling assets jointly as the sole method of estate planning does not address concerns such as the designation of a preference of whom an individual wishes to serve as guardian of his or her minor children upon death, and the designation of a trustee to administer assets of the estate for the benefit of such minor children.