Amy & Dan Smith's Planning for Life: Planning Your Will

A will is a highly protected form of writing. The requirements for a valid will must not be casually regarded. With rare exception in Virginia, only the original of a will – not a copy – may be admitted to probate. To be admitted to probate a will must (1) be in writing, (2) signed by the testator (the person making the will) and (3) signed by two competent witnesses who were both present with the testator either to watch him sign it or to hear him acknowledge his signature. There is a popularly known exception for a will, which is entirely in the handwriting of the testator, called a “holographic” will. However, it is dangerous to rely on this exception because it is very narrowly applied by the courts.

The requisite formalities may not be strictly applied to wills made by persons in military service. Wills made by a person deemed of “unsound mind” or by a minor are not valid.

The most convenient and efficient manner of proving a will is for the will to include a notarized statement (an “affidavit”) reciting that the formalities were followed. If a will is presented with such an affidavit attached, it is said to be “self-proving.” Without the affidavit, the witnesses must appear personally before the clerk or may, in some cases, provide a written statement to prove the due execution of the will.

The will should name the executor (also called the “personal representative”) and, if there are children under the age of 18, a guardian for the person and property of each minor child. An executor is required to give bond at the time he/she is “qualified” (that is, when he/she is appointed). The bond is a personal pledge by the executor in the amount set by the clerk that he/she will perform the required duties of the office. In many cases a “surety” will be required. A surety is a contract from an insurance company to protect the beneficiaries and creditors of the estate. A surety policy requires annual premiums until the estate is settled. Increasingly, insurance companies are raising the requirements for issuing surety contracts making them more difficult to obtain. The will may waive the requirement for a surety. However, while the executor need not be a resident of Virginia, the surety requirement cannot be waived for a non-resident executor. This problem can be avoided by having the non-resident executor appoint a resident co-executor to serve.

The testator expresses his directions regarding the disposition of his estate in the will. The law allows the will to refer to a separate informal writing outside of the will to direct the disposition of items of tangible personal property, such as furniture and jewelry. It is important to note that the will has no effect on property placed in certain forms of ownership such as, for example, property in a living trust, in joint tenancy with survivorship, in accounts with pay-on-death designations, and life insurance and retirement funds with beneficiary designations. These forms of ownership supersede any provisions in a will.

Marriage, divorce and the birth of a child can affect the provisions of an existing will. Thus, in such situations, and upon a change in financial circumstances, the will should be reviewed. A change to a will, called a “codicil,” requires the same formalities as the will.

At the risk of sounding self-serving (admission: your author is an attorney), the do-it-yourself will and trust kits are not recommended. Dollars saved initially are often lost in fees and courts costs necessary to unravel self-made documents.

From "Amy & Dan Smith's Planning for Life" column appearing monthly in the Blue Ridge Leader, Loudoun County, VA.

The foregoing article contains general legal information only and is not intended to convey legal advice.  For legal advice regarding estate planning, the reader should contact his/her lawyer.

Daniel D. Smith is a partner in the law firm of Smith & Pugh, PLC, 161 Fort Evans Road, NE, Suite 345, Leesburg, VA 20176. (Tel: 703-777-6084, www.smithpugh.com). He has practiced law in Loudoun County since 1980.

Amy & Dan Smith's Planning for Life: 12 Financial Resolutions

Review and revamp your financial plan all year long

Instead of hauling out those familiar New Year’s resolutions about eating less and exercising more, how about focusing on something that’s also very good for you in the long run-and even sooner? We’re talking about your financial plan-your fiscal health, if you will. The approach of a new year – or any time, for that matter – is a great time to review your plan and make whatever revisions might be indicated. With that in mind, here are 12 suggested resolutions that, if followed, could help you go a long way toward attaining your financial goals.

Get your balance sheet in order – using December 31 as the effective date, update your personal balance sheet (assets versus liabilities, broadly speaking.)

Review your budget and spending habits – how close did you come to what you had planned to spend last year? Where did you go off-track and what can you do about that?

Review the titling of your accounts – account titling is more than just using the right form – it can also be a tool for estate planning. Review your account titling and determine if that’s still the arrangement you want.

Designate and update your beneficiaries – if you don’t correctly document and update your beneficiary designations, who gets what may be determined not according to your wishes but by federal or state law.

Evaluate your cash holdings – everyone should have a certain amount of their assets set aside in cash.

Revisit your portfolio’s asset allocation – are you comfortable with the current amount of risk in your portfolio?

Evaluate your sources of retirement income – every individual picture is different. Think about how secure each source is.

Review your Social Security statement – use the SSA’s online calculator to compute your benefits at various retirement ages

Review the tax efficiency of your charitable giving – give, but do so with an eye toward reducing your tax liability.

Check to see if your retirement plan is on track – retirement has a lot of moving parts that must be monitored and managed on an ongoing basis.

Make the indicated changes – go after any problem areas – or opportunities-systematically and promptly.

Set up a regular review schedule with your advisor – establish a regular schedule for getting together and reviewing your portfolio, your financial and retirement plans, and what’s happening in your life.

Since we all know that resolutions tend not to survive very long, add one more to make this a baker’s dozen. Resolve to really follow through on these – and give yourself permission to spend a day lazing around watching movies and eating ice cream when you’re done! Just one day though.

From "Amy & Dan Smith's Planning for Life" column appearing monthly in the Blue Ridge Leader, Loudoun County, VA.

The foregoing article contains general legal information only and is not intended to convey legal advice.  For legal advice regarding estate planning, the reader should contact his/her lawyer.

Daniel D. Smith is a partner in the law firm of Smith & Pugh, PLC, 161 Fort Evans Road, NE, Suite 345, Leesburg, VA 20176. (Tel: 703-777-6084, www.smithpugh.com). He has practiced law in Loudoun County since 1980.