You plan your estate to make sure that you properly care for your family after your death – by appointing the right people to serve as executor, guardian and trustee and by directing how and to whom your property should be distributed.

An estate plan can include a will, a revocable (or "living") trust, assets that pass by "beneficiary designation," powers of attorney, advance medical directives, irrevocable trusts, and other sophisticated planning methods.

In a will, you appoint an executor (someone to administer your estate, pay any taxes and other debts, and distribute your property after your death), a guardian (someone to take care of your children after your death), and maybe a trustee (someone to manage trusts created for beneficiaries under your will). In your will, you may also direct to whom your property should be distributed and how. If you don't plan while you are alive, the state will make these decisions for you after you are gone.

A revocable trust (or "living trust") is a will substitute. Generally, a revocable trust includes provisions that direct the distribution of your property after your death (instead of having those provisions in your will). Two advantages of creating a revocable trust are (1) avoidance of probate and (2) privacy. However, neither of these advantages will be realized unless you transfer property to your revocable trust while alive.

In addition, you may own assets that do not pass by will or will substitute at your death. These assets may include joint checking, savings and brokerage accounts, "payable on death" accounts, "transfer on death" accounts, retirement plans, and life insurance. Jointly owned assets will pass to the joint owner(s) on the death of another owner. Assets that are "payable on death" or "transfer on death" accounts pass outside a will to the person or persons named on these accounts. Retirement plans and life insurance pass to beneficiaries named on a "beneficiary designation form" completed by the owner of the assets. Because these assets may make up a significant part of your net worth, it is just as important to consider and plan for the distribution of these assets as it is to decide on the provisions of your will or revocable trust.

A durable power of attorney (for property management) appoints an agent who may act on your behalf for the property you own during your life. You may appoint an agent whose authority begins only if you are incapacitated and unable to act on your own behalf or whose authority begins immediately after you sign the power of attorney.

An advance medical directive sets out your wishes with regard to hydration, nutrition and pain medication that you wish to receive (or not receive) in the event you are unable to communicate your wishes. This is often referred to as a "living will." In addition, you may appoint an agent to make medical decisions on your behalf in the event you are unable to do so.

Estate planning involves thinking about what you want to happen with your property, your loved ones and your medical decisions before a catastrophe or emergency occurs. After a catastrophe occurs, it may be too late for you to implement these decisions. While there are state law default provisions in place to make some of these decisions for you, often the decisions you would make are different than those dictated by state law. The way to avoid these default provisions from taking effect is to make the decisions yourself by planning your estate.

Chris Tate is an attorney who recently moved his practice from Washington, D.C. to Middleburg, Virginia who contributes an Estate Planning column to the Middleburg Eccentric. He has been practicing wills, trusts, estate planning and individual tax law for 11 years, in D.C. and Virginia firms. Chris is licensed in Virginia and Washington, D.C. Chris' office is located at 207 E. Marshall Street in Middleburg, and he may be reached by telephone at (540) 687-4073 or by email at ctate@cftatelaw.com.