Question: What Is Estate Planning?

Answer: Estate planning is a process in which you evaluate your situation and plan for the future. It includes planning for your retirement, for the possibility of disability, and for death. Because every person’s situation is unique, there is no single checklist to follow for estate planning.

Question: What is probate court?

Answer: It is a court supervised process where upon your death, your will, if any is recorded, creditors and heirs are notified and distributes are made in accordance with your will, or if none exists, distribution is made in accordance with state law. Some of the filing requirements in Virginia law are, sending notices to beneficiaries and heirs; inventory or assets and detailed accountings.

Question: What is a revocable living trust?

Answer: A revocable living trust is established during the creator’s lifetime, and the creator can transfer assets to the trust. The creator can also amend or revoke the trust. (See “Living Trusts: A Simple Way to Avoid Courts and Guardianships” in Articles section of website)

Question: How do I title assets into a revocable living trust?

Answer:

  • Bank Accounts and Brokerage Accounts: These accounts can be transferred to the trust by changing the name on the accounts by either providing a letter or completing the forms required by the bank or brokerage firm.
  • Real Estate: Real property can be retitled to the trust by creating a new deed. The deed should be prepared and recorded in accordance with the state law where the property is located. Some recording fees and taxes may be assessed.
  • Retirement Accounts (Individual Retirement Accounts, 401(k)s, 403(B)s, Thrift Savings Plans, etc): Retirement accounts cannot be retitled to a trust during the participant’s lifetime. A trust may be named as a beneficiary of these accounts; however, it is particularly important that you consult with an attorney or other professional advisor familiar with the tax implications prior to changing beneficiaries.
  • Stock Certificates, Certificates of Deposit and Treasury Instruments: All of these types of assets have very specific processes for retitling.
    • Stock certificates must be remitted to the company with a stock power of attorney form.
    • Certificates of Deposit may be reissued through the bank, but penalties may apply if the CD is reissued prior to maturity.
    • Treasury instruments (EE bonds, HH bonds and treasury notes) should be remitted to a federal reserve bank with the proper U.S. government form.