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Important Terms to Know in DC Estate Planning

There are a lot of technical terms in the DC estate planning process and it’s very easy to confuse them. The documents are usually very specific and involve terms such as trustee, grantor, beneficiary, heir, and descendants. Tax planning concepts are unique to a client’s assets. It’s a very specific and technical language-based area of the law. Discussing these terms with a DC estate planning lawyer can make the entire process much more understandable.

It is important for a person to speak with an attorney to make sure sure they are using these terms correctly in their estate planning document. For example, individuals that are not familiar with the law may use the term heirs, which may have a different connotation than issue, decedents, or beneficiaries.

There are very specific terms that apply to a person’s estate planning needs and to the creation of their personalized estate planning documents.  Ensuring that you have used the terms correctly in your estate planning documents often requires a review of the documents by an estate planning attorney in DC.

Unique Concepts in DC Estate Planning

Estate planning is a unique practice area because it requires a knowledge and understanding of several different areas of law. A DC estate planning attorney is often required to be familiar with the probate process, tax laws, income tax laws, estate tax laws, state tax laws, real estate concepts, and federal tax laws. In the Washington, DC metro area, this often requires that an estate planning attorney stay abreast of the laws in several states.

Executor or Personal Representative

Executor is the most well-known term in estate planning. However in DC, the term for executor is actually Personal Representative. In the District of Columbia, a Personal Representative is often nominated in a grantor’s last will and testament. If a grantor failed to nominate a Personal Representative, or the nominated Personal Representative is unwilling or unable to act, the laws of the District of Columbia provide a default order of priority for who may serve.

Generally, a Personal Representative in DC is the individual responsible for administering the estate; filing the necessary probate pleadings and court reports; marshaling all of the estate assets; paying any legally enforceable debts; and preparing and filing any necessary income or estate tax returns. The Personal Representative then makes distribution according to the provisions of the last will and testament. If there is no last will and testament, then the Personal Representative makes distribution pursuant to the District of Columbia’s intestacy laws.

Estate Administration in DC

Estate administration is the process of administering someone’s last will and testament or their estate after their death. It usually involves filing any necessary probate pleadings with the court, marshaling all of the assets of the estate, paying any legally enforceable debts, filing any necessary income or estate tax returns, and making distribution to the decedent’s heirs or beneficiaries as named in the last will and testament.

Last Will and Testament

A last will and testament is a person’s instructions for the distribution of their assets or the management of their assets after their death. Generally, to be valid, a will in the District Columbia must be signed by the grantor and witnessed by two independent witnesses.

A last will and testament often nominates the grantor’s choice for Personal Representative and describe the responsibilities of the Personal Representative. The will also describe how the grantor wants their assets to be distributed and the grantor’s wishes for burial or cremation.

Advance Medical Directives

An advance medical directive and a medical power of attorney can be similar documents. The goal of the document is to nominate an agent to make healthcare decisions for someone when they are no longer able to do so. An advance medical directive or medical power of attorney waives the HIPAA regulations so that the named agent is able to speak with an individual’s doctors and receive medical records.

These documents typically express the person’s wishes for life support, nutrition, hydration, and medical procedures or medicine to alleviate pain, in the event the person is in an end stage condition, has a terminal illness, or is in a permanent vegetative state with no reasonable hope for recovery.

An advance medical directive can also express a person’s wishes for organ donation. The document may also include wishes for burial or cremation at death.

Probate

Probate in DC is the term used to describe the court proceedings initialized after the decedent’s death. The type of probate proceeding required is dictated by the estate plan in place and, if there is no will, by the laws of intestacy. It involves filing a last will and testament, and often filing a petition to have a Personal Representative appointed by the court to serve on behalf of the estate.

Intestacy

Intestacy is used to describe the set of default laws the District of Columbia provides in the event a person has not prepared a last will and testament prior to death or a decedent’s last will and testament is invalid. For example, if a person dies without a will, the intestacy laws dictate how their assets are distributed, and who has a priority to serve.

Power of Attorney in DC

A power of attorney for financial or legal purposes is a document that nominates an attorney-in-fact to act on a person’s behalf in the event they are unavailable or incapacitated to make those decisions on their own. Typically, a power of attorney allows someone to make any legal and financial decisions prescribed by the terms of the document.

Guardianship for Minors and Incapacitated Adults

Guardianship proceedings in DC are initiated in two different circumstances. Clients are often most familiar with the concept of naming guardians for their minor children in their last will and testament or trust documents. Parents often name individuals to act as guardians of their minor children in the event of the death of both parents. The guardian named is nominated to care for the child and often manages the child’s assets until he or she reaches the age of majority.

Guardianship proceedings can also be initiated when an adult lacks the capacity to make financial, legal, health care or living decisions on his or her own behalf. Guardianship proceedings can often be avoided if the adult lacking capacity created a power of attorney for financial and legal purposes and a medical power of attorney prior to the loss of capacity. If no such documents exist, an individual may petition the court to intervene on the adult’s behalf to make those decisions. Guardianship proceedings for adults lacking capacity can be very costly and timely. Even if a guardianship proceeding is successful, continued court intervention is required until either the adult recovers from his or her capacity or passes away. It’s best to avoid the necessity of a guardianship proceeding by having a power of attorney, a medical power of attorney or advance medical directive.