Estate Planning Documents and Descriptions
Document Descriptions and a Glossary of Common Terms
for Estate Planning in Virginia

Will:

A Will can be the most important instrument in any estate plan. Your Will is an official written document that states your intentions for your estate. More importantly for parents, a Will communicates to the court your preferences for Guardians for your minor children. A properly designed
Definitions of Wills, Trusts, Powers of Attorney, Living Wills
instrument can also contain testamentary Trust provisions and nominations for Trustees for your children’s inherited estate, to ensure that the inheritance is used to maintain their health, education, and general well-being until they reach adulthood; additionally, such trust provisions can direct that the final distribution of the inheritance is postponed until the beneficiaries reach a suitable age for management of finances.

A Will additionally nominates Executors and lists beneficiaries in order of inheritance. If you have a blended family structure, the Commonwealth of Virginia has laws in place to distribute your estate between current spouses and children from former relationships if you die without a valid Will. A well-drafted Will bypasses the inheritance laws of Virginia, and ensures that your estate passes the way you plan. Wills must be drafted, witnessed, and executed in a specific manner under Virginia law, in order to be recognized as valid.

Executor:
Your Executor presents your Will for probate, and after qualification will represent the best interests of your estate and make distributions in accordance with your wishes. Qualified executors may also opt to retain an attorney or probate management firm to distribute the estate.

Trust:
A Trust is an entity created on paper, which can hold title to assets for management on behalf of a class of beneficiaries. Trusts come in hundreds of shapes and sizes, but two of the most common forms of Trusts for families are
inter vivos Trusts and testamentary Trusts. An inter vivos (living & active) Trust is a fully drafted and executed document, with specific provisions for the current management and distribution of assets on behalf of beneficiaries such as the Grantor, the Grantor’s spouse, and the Grantor’s children from current and prior marriages. A testamentary Trust is not a current instrument, but can be created under the terms of a Will to hold assets for young beneficiaries (or the Grantor’s spouse) until certain conditions are met, such as the beneficiary reaching an appropriate age to assume management responsibilities for the Trust Fund.

Trusts can hold title to real estate, insurance policies, or other assets, and can be designed for maximum flexibility in management and distribution of those assets. Trusts can be fully funded or unfunded, can be managed by the Grantor or by another person or entity, and the variety of provisions available for Trusts makes this form of planning one of the most comprehensive types of estate planning. The creation of an
inter vivos Trust is generally more expensive than estate planning with Wills and testamentary Trusts, but inter vivos Trusts provide for increased flexibility and control by the Grantor over asset management and distribution after death.

Trustee:
The Trustee is charged with managing a Trust on behalf of young beneficiaries until such beneficiaries reach the age of distribution, or will be responsible for retaining a professional trust management company to do so. Distributions from Trusts most commonly established with language from an Arbor Standard Will provide for the health, education, maintenance, and support of beneficiaries, as well as providing financial support for guardians.

Guardian:
The word “guardian” under Virginia law can have many different meanings, but for the purposes of Arbor estate planning documents, a guardian is a person nominated by the parent to take over physical custody of an underage child after both parents are deceased. The courts in Virginia have the final approval of any person so nominated, but absent a Will, the court can only consider those persons who bring themselves forward for appointment; such family members or friends may not have been the first choice of the parents.

Power of Attorney for Finances:
A Power of Attorney is a formal document that gives certain powers to an agent to act on the behalf of the Grantor. Powers of Attorney can be Durable (active from the time the document is signed) or Limited (active only after a certain intervening event is documented, such as the physical incapacity of the Grantor), and are very useful in avoiding court appearances in the event the Grantor becomes incapacitated.

Power of Attorney for Health Care & Advance Medical Directive (Living Will):
A Durable Power of Attorney for Health Care grants your agent the authority to make health care decisions on your behalf and to have access to your medical files when you are unable to convey your preferences for health care, such as when you are unconscious or suffering from an impediment that prevents informed communication. Arbor’s Power of Attorney for Health Care also includes Advance Medical Directive provisions; these provisions state that if at any time your attending physicians determine that you have a terminal condition where the application of life-prolonging procedures would serve only to artificially prolong the dying process, your agent may direct that such procedures be withheld or withdrawn, and that you be permitted to die naturally. These provisions can be removed for clients who wish to have a more basic Health Care Power of Attorney, or who may object to the AMD language for religious, scientific, or medical reasons.
*Advance Medical Directives are also known as Living Wills; the Virginia legislature enacted a law authorizing this form of directive and the appointment of an agent, and adopted the phrase “Advance Medical Directive” in lieu of the less-specific and somewhat confusing “Living Will” language.