Tag Archives: power of attorney

How to Update Your Estate Plan After a Divorce

estate planning after divorce

Updating Your Estate Plans After a Divorce
NOVA Estate Lawyers – Leesburg, VA

The divorce process is often a very long and painful one. Although you may have already moved on emotionally, some legal aspects of your life can’t move forward until your divorce is finalized by the court.

When you do receive that long-awaited divorce decree, one of your first priorities should be updating your estate plans. If you didn’t enter into a settlement agreement or obtain a “divorce from bed and board” during your separation period, your spouse may still have been entitled to inherit as much as 50 percent of your estate if you die during that time. Once you’re no longer legally married, your ex cannot benefit from your estate unless you want them to.

One exception is retirement accounts and life insurance if governed by federal law. You must update your beneficiary designations to remove your ex’s name from them if you want to be certain they do not inherit from you (see more on this below).

Which estate planning documents should I update post-divorce?

Following your divorce, you’ll want to review all your essential estate planning documents to see where your spouse is named. Here are a few common items to address:

Your will. As mentioned above, an ex-spouse won’t inherit anything left to them in your pre-divorce will, nor will they be allowed to serve as your executor if you named them as such. But if you don’t appoint a new executor and beneficiaries for your estate, a probate court will decide that for you. To reduce time, frustration, and costs for your family, make sure your will gets a thorough revision after your divorce. It’s important to note that any bequests to an ex-spouse’s family members will still be valid, so considering changing those as well.

Trust arrangements. Unlike your will, spousal trust arrangements are not automatically voided upon divorce. If you named your spouse as a trustee or beneficiary in your revocable living trust, consult with an estate planning attorney to make the appropriate changes. Unfortunately, if your trust was irrevocable, you cannot change it to exclude your ex-spouse unless that trust contains administrative provisions at the time it was originally drafted that permit you to void the document if you and your ex ever divorce.  In addition,  if you never funded that irrevocable trust, then you could control what happens with it by simply choosing to create a new trust and never titling any assets into the old irrevocable trust created during your marriage.

Power of attorney agreements. In Virginia, a durable general power of attorney (for financial decisions) where a spouse is the agent is deemed invalid upon filing for divorce or separation. However, a durable medical power of attorney – which lets your agent make medical decisions for you if you’re incapacitated – still stands, even after a divorce. If your spouse is currently named as your POA agent, change these designations as soon as possible.  If you’re entering into a settlement agreement, make sure it contains provisions that revoke your spouse’s role under all powers of attorney executed by you during the marriage.

Legal guardianship designations. If you and your ex have minor children, you likely named a legal guardian together in your wills in the unlikely event you both died. While courts typically grant custody to a child’s other parent when one dies (unless they are deemed “unfit”), be sure that any other guardians named in your will are people you still feel comfortable with, such as an in-law.

Direct beneficiary accounts. Insurance policies, retirement plans, and other “payable on death” accounts have their own separate beneficiary paperwork. By law, certain policies will not pay out to an ex-spouse, but it’s still important to appoint new beneficiaries after your divorce to ensure your money goes where you want it to.

What if I want to keep my ex-spouse in my estate plan?

The Commonwealth of Virginia automatically negates any inheritance to an ex-spouse in wills written prior to a finalized divorce. However, there may be circumstances in which you still want your include your ex in your estate plan, particularly if you have minor children.

If you want to leave money or property to your ex-spouse specifically for the care for your children, the best way to do this is to create a revocable living trust. This allows you to title your property in the name of your trust and then appoint your ex as the trustee, who manages the assets on behalf of your children until they reach adulthood. If you don’t already have a trust, an attorney can help you create one.

If you have an amicable relationship with your now-ex and still want to leave property directly to them, all you have to do is write this into a valid post-divorce will.

Ask an estate planning attorney.

Even if you know exactly how you want to change your will, trust, power of attorney agreements, etc. post-divorce, you should still consult with an estate planning attorney to make sure your documents have the proper legal language and offer the maximum benefits for your loved ones.

Located in Northern Virginia, The Law Office of Patricia E. Tichenor, P.L.L.C. is experienced in both estate law and family law, so we are uniquely positioned to help with your estate planning needs after your divorce is final. Contact us today to get started.

Estate Planning Documents: What Do I Need?

estate planning documents

Essential Estate Planning Documents
NOVA Estate Lawyers – Leesburg, VA

You probably know you need to write a will to distribute your property and financial assets following your death. This is a good start, but for a comprehensive, complete estate plan, you’ll need a few more essential documents.

Other estate planning tools, such as a living trust and a power of attorney (POA) agreement, work in conjunction with your last will and testament to make sure your intentions are honored on all fronts. Without these additional documents, a probate court may have the final say over what happens to parts of your estate, a process that is both costly and potentially heartbreaking for your loved ones.

Before concluding that your estate plan is complete, be sure that you’ve determined whether you actually need all or some of the following estate planning documents to achieve your specific goals for your plan:

1. Last will and testament

When drafted according to your home state’s laws, your will is a binding legal document that tells a probate court how to follow your final wishes. Every will needs an executor – whether it’s a family member, friend, or trusted professional like an attorney – to oversee the management of your assets after your death. This person will pay your final debts and expenses, file estate taxes, and make distributions to your named beneficiaries.  They will also distribute items from your tangible property list to named beneficiaries if you leave such a list.

2. Revocable living trust

While you still always need a will, many estate planning attorneys recommend distributing some property via a revocable living trust. A trustee of your choosing will manage the assets titled into the name of your trust (before and after your death) – without court interference – on behalf of the beneficiary you designate.  If you decide to add a living trust to your estate plan, then you can have a very simple will that functions as what’s called a “pour-over will,” to allow your executor to merely serve to transfer to the control of your trustee and your trust any assets that you did not title in the trust prior to your death, did not name the trust as the beneficiary of prior to your death, or did not name a living person to receive at your death.

3. Durable general power of attorney and durable medical power of attorney

The person(s) you name in your power of attorney agreements are the ones who have the legal right to make financial and healthcare decisions for you if you become incapacitated during your lifetime. Your POA agents should be individuals whom you trust to act in your best interest if you are mentally or physically unable to communicate your intentions.

4. Beneficiary designations:  Guidance on Non-Probate Planning

Most people know that for assets such as retirement plans and insurance policies, you need to fill out the beneficiary designation forms provided by the company that holds your account. Forms for such assets supersede your will instructions, so always keep them up-to-date, especially if you’ve had any recent major life changes.  However, you can do this with many other types of assets and are encouraged to seek guidance on doing so as part of a comprehensive estate plan.

5. Legal guardianship designation

If you have minor children, you’ll need to choose a trusted legal guardian to care for them if you become disabled or die before they are of age. It’s wise to have this discussion with your potential guardian before naming them in your estate plans. If you don’t, the process can be costly and stressful for the children and family members to deal with, including home visits, possible foster family care, and court appearance to have someone appointed guardian.

Optional: Letter of intent

Although it’s not considered a legally valid estate planning document, you may want to create a letter of intent to guide your estate executor with specific instructions to follow upon your death, including potential funeral arrangements.  Such letters could be a good way to communicate your final burial wishes or the reasons for making certain gifts to certain beneficiaries.   Lastly, such letters might also help a probate court interpret your will and intentions if any part of it is called into question.

Need estate planning forms? Speak with your attorney.

Not sure where to begin with your estate plan documentation? The The Law Office of Patricia E. Tichenor, P.L.L.C. can help. We have been assisting Northern Virginia families with their estate planning needs since 2001.

Contact us today to learn how we can help you create the best plan for your family’s future, and ensure that all the necessary forms are complete and legally sound.

4 Common Estate Planning Mistakes You Can’t Afford to Make

Estate Planning

Estate Planning Mistakes to Avoid
NOVA Estate Lawyers – Leesburg, VA

Estate planning can be a difficult and stressful process, and mistakes and oversights are common. After all, there’s a lot to consider when writing a will and naming beneficiaries, and it’s easy to miss a thing or two.

Unfortunately, the cost of these errors often falls on your loved ones when certain aspects of your will are not properly carried out.

Below are four frequent estate planning mistakes that could jeopardize the execution of your final wishes.

1. Only writing a will

A will is the most commonly discussed estate planning document, but it’s not the only one you need. You should also have a power of attorney – a legal agreement to give another person the authority to make important financial and medical decisions for you if you have lost the capacity to do so yourself while you’re alive. You can have separate POA agreements for financial versus medical decisions, but whoever you choose for the role(s) should be someone you trust to act in the best interest of you and your family. Without these documents, a court-appointed agent or a doctor could be the one making decisions about your assets and medical care.

2. Assigning responsibilities to the wrong individuals

Naming someone as an estate executor, a trustee, or a guardian to your minor children may seem like a great honor, but it also comes with a tremendous amount of responsibility. Think about whether the people you choose for these roles can handle the duties involved, as well as whether they might let family conflicts or greed get in the way of carrying out your intentions. Sometimes, it’s better to name an objective non-family member or hire a professional trustee who does not stand to benefit from your assets.

3. Never updating your will or beneficiaries

Estate planning is not a one-and-done activity. As you go through life, your circumstances and relationships will change, and you need to continually update your estate planning documents to reflect your current situation, especially if someone you’ve named as a beneficiary passes away or is otherwise no longer in your life.

Many experts recommend reviewing your will every three to five years, but at minimum, you should update it whenever you experience a major life event – marriage, divorce, the birth of a child, the death of a relative, etc. It’s also important to keep track of assets that are transferred outside the probate process – such as retirement accounts, life insurance, and joint property – and ensure your beneficiary designations are up-to-date.

4. Not making estate plans at all

A 2017 BMO Wealth Management survey found that a staggering 52 percent of Americans have not made a formal will. Verbally telling family members about your intentions or writing a letter for your children to open upon your passing does not constitute a legally valid last will and testament.

It can be scary to face your own mortality and procrastinate on estate planning, but it’s even scarier to think about the legal, financial, and emotional aggravation your children and surviving relatives will have to deal with if you don’t have a plan in place.

How to Avoid Estate Planning Mistakes

The best way to secure your family’s future is to work with a professional to create and update your estate planning documents. An experienced estate planning attorney will help you cover all your bases, and include the right legal language to ensure your wishes are honored. Even if you write your own will, you should still hire a lawyer to review and revise it.

Contact The Law Office of Patricia E. Tichenor, P.L.L.C. to speak with one of our counselors about your estate plans today.

Will Your Estate Plan Be Impacted by the New Tax Law?

Estate Planning Under the New Tax Law

Estate Planning Under the New Tax Law
NOVA Estate Lawyers – Leesburg, VA

When the Tax Cuts and Jobs Act (TCJA) was signed into law in December 2017, it brought numerous, significant changes for individuals and businesses alike.

With Tax Day 2018 behind us, many taxpayers have already felt the impact of this sweeping tax reform. Overall, the changes promise to benefit the average American – some of the provisions of the new law include:

– A lower top tax rate
– Increased standard deductions
– New or increased credits for qualifying children and dependents
– A deduction equal to 20 percent of “qualified” pass-through business income; and, beginning in 2019
– The repeal of the “individual mandate” for minimum essential health coverage and its associated penalty

One important change to the tax code under the TCJA is an increase to the estate and gift tax exemption. Previously, estates and lifetime gifts valued at $5 million (or $5.49 million, indexed for inflation) and higher were subject to federal estate taxes. The new limit, effective January 1, 2018 through December 31, 2025, is $11.2 million ($10 million base) for individuals and $22.4 million ($20 million base) for married couples. Put simply, the vast majority of American estates are now exempt from federal estate taxes.

It’s important to note that if you live in one of the 15 states with an estate or inheritance tax (or both), your estate may still be subject to state taxation if its exemption limits are not tied to the federal limits. Detailed information can be found on the Tax Foundation website.

Why Now is the Right Time to Review Your Estate Plans

Although your current assets may be nowhere near the new federal exemption limit, now is a good time to review your current will, trust, powers of attorney, or other estate planning documents. These new limits are only in place through the 2025 tax year, and will return to the previous $5 million limit afterward. The limit increase could even be reversed sooner, depending on congressional and presidential elections between now and then.

During this temporary increased exemption period, you can clarify your estate plan and ensure that your loved ones are set to reap the maximum benefits – with the least amount of taxes – when you pass away.

Of course, taking advantage of these exemptions requires estate planning documents with the proper legal language and specificity to make sure your wishes are honored. For example, married couples must invoke portability in their estate plan for the surviving spouse to avoid the estate tax on spousal inheritance that was within the exemption limits.

It’s also critical to customize your powers of attorney with specific instructions regarding the distribution and gifting of your financial assets. If your POA is too vague or general, your estate executor and/or financial agent now may not be able to distribute your estate plan to ensure the greatest tax savings to your estate or may have access to  a loophole to legally distribute your money as they see fit – and  not  in ways you intended.

Contact an Experienced Estate Planning Lawyer

Any time there is a change in tax law, life circumstances, or both, you’ll want to consult an experienced estate planning attorney who can help you navigate the complex and often emotional facets of planning for your family’s future. Contact The Law Office of Patricia E. Tichenor, P.L.L.C. to speak with one of our counselors about your estate planning needs today.

The Law Office of Patricia E. Tichenor, P.L.L.C.
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(703) 669-6700

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  • High quality service with both personal and a professional touch. I would highly recommend their services, they helped prepare my estate in the event of my demise. They also prepared the necessary documents to complete my wife's estate after her passing, both with outstanding results. - Jim D.
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