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What You Do and Don’t Need from Your Estate Planning Attorney

What You Really Do and Don’t Need from Your Estate Planning Attorney

What You Do and Don’t Need from Your Estate Planning Attorney |
NOVAEstateLawyers.com

Whether you’re drafting your first Will or updating an existing plan, it’s important to work with a trusted estate planning attorney throughout your lifetime. Not only does this ensure your final wishes are documented and all your beneficiaries and heirs are covered, but it also provides you peace of mind knowing your plans are legally sound and properly drafted.

To help you get the most out of your arrangement, here are some things you do and don’t need to discuss with your estate planning attorney.

You DO need a Will.

A Will is a legal document that outlines your wishes regarding your estate. This includes decisions like who gets your property, who will care for minor children, how your financial assets will be distributed, and more. It’s important to have a Will in place at any age to ensure your wishes are granted should something happen to you, and that your beneficiaries do not face any challenges inheriting from your estate.

You DO need powers of attorney.

Thinking about death or incapacitation is scary, but not having a plan in place for who will manage your assets, pay your bills, or make medical decisions for you is even scarier. That’s why every estate plan should include signed financial and medical power of attorney documents.

Without a designated power of attorney (sometimes referred to as your “attorney-in-fact” or your “agent”) to manage your financial affairs and medical decisions (including end-of-life decisions), the courts may be called upon to decide, and they could select a person that you may have never wanted in those roles. It is also far more expensive to go this route than to have powers of attorney drafted and signed in advance—about 10 times more.

You DO need standby guardians for your minor children.

When individuals have children under the age of 18, they need a Designation of Standby Guardian that appoints a trusted friend or family member to care for their child(ren) should both parents pass away or suffer a severe illness or injury that renders them unable to care for the child(ren) themselves.  In some states, including Virginia, there is also a special Power of Attorney form now available, but that document only remains in effect for six months at a time, and must be re-executed at the end of the 6 months.

You DON’T always need a trust.

Many people exploring estate planning for the first time are confused about whether they really need a trust. Trusts can be very useful, but they are also very expensive and require additional steps after you sign to fund them or re-title your assets in the name of the Trust.

If your total estate is valued at less than the current federal estate tax exemption of $11.7 million, you don’t necessarily need a trust to shield a portion of your taxable assets (although this exemption amount will eventually be reduced). Moreover, if the beneficiaries of your estate are residents of a state that does not have an inheritance tax, you may then only need a well-

written Last Will and Testament rather than a trust as part of a comprehensive estate plan.

You can also use something called a Revocable Transfer on Death Deed, sometimes called “the poor-man’s trust” to leave real estate you own directly to a loved one without it ever having to pass through a Will or probate.

You DON’T need to add your funeral wishes to your Will.

Many people assume they must include detailed funeral instructions in their estate plans, but this is a common misconception. The probate process typically happens after your funeral and therefore will likely not even be seen by your loved ones in time to make your desired arrangements. However, you should still discuss your wishes with your family or loved ones during your lifetime. Common points to cover include whether you want a funeral service; if so, where it will be held; who should be notified about your death; whether you want to be cremated or buried; etc.

Contact a trusted estate planning attorney for guidance.

If you do not have a valid Will or your current estate plans are more than five years old, we strongly recommend that you meet with an experienced estate planning attorney to set them in place immediately. You never know when illness or an accident will strike, nor do you know the impact it will have on your family or children if you have no plan or an outdated plan in place.

Looking for legal advice or documents needed to ensure your estate’s security? Schedule a free consultation with the Law Office of Patricia E. Tichenor for more information

How to Create an Estate Plan for a Disabled Beneficiary

estate planning for disabled beneficiary | parent pushing child in wheelchair

Estate Planning for a Disabled Beneficiary | NOVAEstateLawyers.com

Many people choose to create an estate plan to provide for their loved ones after their death. In some cases, this may include providing care for a person with a physical or mental disability.

If you intend to leave any portion of your estate to a disabled beneficiary, it’s crucial to develop your plan carefully to meet that beneficiary’s individual needs. A well-developed plan will ensure that your loved one receives the maximum amount you wish to leave them from your estate, without disqualifying them from certain government benefits.

Here are some considerations to keep in mind and include when creating an estate plan for a loved one with a physical or mental disability.

How to create an estate plan for a disabled beneficiary

There are several estate planning strategies that will ensure your loved ones are cared for after your death, including provisions in your Will and a Special Needs Trust (SNT).

When your estate plan includes a disabled beneficiary, there are additional steps you’ll need to take to ensure their individual needs are met:

  • Understand the type of disability. The needs of someone with a physical disability will differ from those with a mental disability, and specific physical or mental disabilities will require specific supports. The interaction of multiple diagnoses can also play a role into the type and degree of disability.
  • Understand the beneficiary’s abilities and limits. Even within a given diagnosis of a physical or mental disability, each individual has their own unique abilities and limitations. Keep in mind what your loved one can do, in which areas they need support, and the level of support they need.
  • Consider their future needs and whether their condition will require extra help. In addition to considering your beneficiary’s current needs, you will also need to keep in mind their future needs. If they will need special housing or care down the road, include any specifications for these in your estate plan.
  • Determine the government benefits and sources they rely on. Government programs like Medicaid and Supplemental Security Income (SSI) programs have specific qualification requirements, including limits on the assets or income a beneficiary may have in order to qualify for such benefits. If your loved one relies on these programs, check the eligibility requirements to ensure that your estate plan does not disqualify them.

Disinheriting a beneficiary with a disability

One estate planning option is to disinherit the disabled individual. Though this may seem counterintuitive, the process of disinheritance allows your loved one to continue collecting government benefits while also being supported by any siblings or close relatives.

In essence, a disinheritance estate plan would leave the entire estate to the surviving relatives of the individual with a disability, while also legally obligating them to use a portion of the inheritance to provide care for their disabled sibling.

While disinheritance is a less complicated option than including a disabled beneficiary in your estate plan, it also has potential downsides. One major disadvantage is that your loved one may not receive the full portion of the estate that you intended for their care. Factors such as sibling bankruptcy, divorce, or failure to fulfill their obligation of support can all reduce the amount of the estate that the disabled sibling actually receives. Additionally, the process of disinheritance can also harm the relationship between the disabled individual and the person making the estate plans.

Get help with your estate plans

Estate planning can be a complicated process, especially when planning for the care of someone with a physical or mental disability.

If you are in the process of creating a Will that includes a disabled beneficiary, contact the Law Office of Patricia E. Tichenor for help. We have 20 years of experience handling estate planning for Virginia residents and can guide you and your family through the process.

Contact us today to schedule a free 30-minute consultation about your estate planning needs.

7 Things You Should Never Include in a Will

man sitting at laptop contemplating what not to include in a will

What Not to Include in Your Will | NOVAEstateLawyers.com

When you’re creating a Will, you likely know you need to include specific instructions for how you want your assets distributed and who you wish to serve as your executor. However, it’s just as important to understand what not to include in your Will.

Estate planning can be complicated, and an improperly drafted Will could result in hassles for your loved ones and your wishes not being carried out as intended. As you’re drafting yours, here are seven things to avoid adding if you want a legally valid document.

What to avoid putting in your Will

1. Certain types of assets

Different types of assets have different rules that govern how they’re distributed after you die. These rules are independent of your Will. For example, joint tenancy property will legally go to the surviving tenant, while certain assets like life insurance, retirement plans, and stocks and bonds will go to your designated “pay-on-death” beneficiary.

2. Funeral instructions

Many people mistakenly believe their desired funeral plans should be stated in their Will. However, the execution and settling of the estate typically doesn’t happen until after the funeral. If you include your funeral arrangements, they likely won’t even be seen until after your services.

To ensure your funeral wishes are executed, talk with your loved ones about the type of service and burial you’d prefer and let them know you’ve made certain indications of those wishes in your Will but may also prepare additional details in a separate document.  If you do create a separate document outlining your wishes, make sure to give it to the intended executor of your Will during your lifetime to make sure your funeral happens as you envisioned.

3. Conditions for gifts

Often people will put certain conditions on gifts that are stated in their Will. However, not all of these conditions have the ability to be executed legally. For example, you may wish to leave a grandchild a sum of money for when they graduate college or leave someone in your family a certain property if they use it for a professional endeavor. These conditions can be loosely enforced by the executor of your Will, but they can be challenged if someone disagrees.

It’s important to note that any condition that includes marriage, divorce, or the change of religion (e.g., “This person can only inherit my house if they remain single and unmarried.”) cannot be included in a Will, as it cannot be enforced in a court.

4. Care instructions for a person with special needs

If you would like to arrange care for a dependent with special needs or a disability, your Will is not the place to do it. Instead, it’s best to set up a separate document called a special needs trust that will specifically address the management of care for someone with special needs.

5. Pet inheritance

As animals do not have the legal capacity to own property, you cannot leave any gifts directly to a beloved pet. What you can do is use your Will to leave your pet to someone who you know will provide for your pet’s care. You may also set up an irrevocable Pet Trust, either as an additional provision of your Will or as a separate trust document, which will allow you to pass on any property, money, or assets to your designated caretaker to help them provide for your pet according to your wishes.

6. Joint assets and Retirement Accounts

Much like joint property, any funds or money that is in a joint account will automatically go to the other surviving account holder. It is unable to be inherited by anyone else until the other account holder passes away.  In addition, if you want to allow your beneficiaries to defer additional taxes and penalties associated with the probate of your retirement assets, it may be important for you to discuss the pros and cons of naming a beneficiary (such as a child) as a pay-on-death beneficiary after your spouse or omitting any secondary beneficiary so that the retirement will pass through your Will and be managed by a trustee named therein for a child’s benefit.

7. Leased or rented assets

You cannot gift anything that is not entirely legally yours in your will. This includes a leased car or a rented home or apartment. These assets will be returned to their legal owner once you have passed.

Get help properly drafting your Will

If you are currently in the process of creating a Will, contact the Law Office of Patricia E Tichenor. We have over 20 years of experience handling estate planning for Virginia residents and can guide you and your family through the process. Contact us today to schedule a free consultation about your estate planning needs.

7 Commonly Overlooked Elements to Consider in Estate Planning

couple sitting with estate planning lawyer | commonly overlooked estate planning items

Commonly Overlooked Estate Planning Items | NOVAEstateLawyers.com

No matter your age, health, or life circumstances, it’s never too early to think about estate planning.

When drafting your estate plan, you’ll want to make sure you cover all your bases. Here are some commonly overlooked items to consider when creating yours.

1. Incapacity

When drafting an estate plan, many people focus solely on what happens to their assets when they pass away. However, it’s also very important to plan for incapacity and consider what might happen if you were physically or mentally unable to make decisions for yourself. In this case, you’ll want to appoint someone you trust to serve as your agent under a Durable Medical Power of Attorney and Living Will (for medical and end of life matters) as well as a Durable General Power of Attorney (for financial matters), so that this person can protect you and your assets when you are temporarily or permanently unable to do so yourself.

2. Asset management for minor children

If you have minor children, you’ve likely considered who you might designate as their legal guardian if something were to happen to you and/or their other parent before they reach adulthood. However, it’s also important to think about the management of any inheritance or assets they would receive in the event of your premature death.

A revocable living trust can be a handy estate planning tool for protecting your minor children’s inheritance by ensuring it is managed by an appropriate trustee until your children are mature enough to manage it for themselves. It also ensures that your estate does not end up in the hands of someone else should the child inherit from you outright.

3. Digital assets

As our lives become increasingly digital, many of our assets exist online. However, many estate plans fail to consider digital assets like photos and videos, emails, social media accounts, documents, and more.

It’s important to authorize your agent under your financial power of attorney or your executor under your Will or your trustee under your Trust to handle all of your accounts, including setting up a new user ID or password for such accounts, rather than having to write that private information down and constantly have to update it.  Of course, making a list of what accounts you have, so that these individuals know what needs to be protected is extremely helpful even after you sign your estate planning documents, and you should periodically update it if your accounts change.

4. Divorce protection

While you didn’t enter your marriage with a plan to eventually get divorced, you’ll want to prepare for anything when drafting your estate plan. This means protecting your assets in the case of separation or divorce from your spouse. Though you might plan to distribute your assets to your spouse, understand how a divorce will affect or change your estate plan.

5. Updates/changes that impact your estate plans

Estate planning is not a one-and-done effort — there are many life changes that can impact your estate. To ensure your estate is ready for anything life throws at you, frequently revisit and update your plan to accommodate such changes. For example, family deaths, births, divorces, etc. are all potential game-changers in estate planning. Periodically review your estate plan to ensure your wishes are still relevant.  Make sure you understand what assets will, in fact, be controlled by your estate planning documents and which will not.

6. Ever-changing tax exemptions

Tax exemptions can impact your estate and its heirs, particularly around lifetime gifting. If you have significant wealth or expensive properties, review your tax exemption options each year to lessen any potential financial burdens.

7. Seeking expert guidance

Rather than consulting with a professional, many individuals try to save money by drafting their estate plans on their own. However, doing so could mean you miss out on potential tax exemptions, fail to protect your assets, or overlook any of the above elements.

Estate planning is a challenging process, and working with an expert can help you avoid potential issues along the way. The Law Office of Patricia E. Tichenor has 20 years of experience handling estate planning matters for Virginia residents.

If you need help drafting your estate plan, we can guide you and your family through the process. Contact us to schedule a free consultation about your estate planning needs.

6 Estate Planning Resolutions for 2021

2021 estate planning resolutions | 2021 blocks on coin stacks

2021 Estate Planning Resolutions | NOVAEstateLawyers.com

Whether they’re for self-improvement, career-oriented, or health-related, New Year’s resolutions can help set the tone for the next 365 days and beyond.

That’s why we recommend adding estate planning resolutions to your list. It’s never too early to determine how your estate and other assets will be distributed to your family and loved ones, especially with potential changes to estate tax laws under the incoming Biden administration.

Here are six important estate planning resolutions to make in 2021.

1. Draft a Will if you don’t already have one.

A valid Will is a document that directs, under the supervision of a probate court, how you want (and to whom you want) to distribute your property and financial assets when you die. Without one, you may open your family up to unnecessary expense and stress, and see your assets pass to persons (or ever your creditors) in a way you would never have wanted.  In your Will, you should name a trusted executor (such as spouse, family member, close friend, or, in certain cases, an attorney or CPA), who is willing to be responsible for overseeing the management of your assets after your death.

2. Create a revocable living trust.

A revocable living trust is another estate planning tool that aids in the transfer of property. A revocable living trust can be adjusted at any time during your life and preserve certain assets for specific reasons important to you, such as keeping the family home for your children to continue to be raised in if both you and your spouse die. If you have minor children, a revocable living trust allows you to designate how their inheritance and finances will be managed until they reach an age (or set of ages) you feel most comfortable giving full control to them over their inheritance.

3. Update your powers of attorney, executor, and/or beneficiaries if any family circumstances have changed.

Ideally, the person(s) you name as attorney-in-fact under your powers of attorney and executor in your will is someone you trust to keep your best interests at heart. Unfortunately, your initial choices for these roles may not always remain the same.

A designated attorney-in-fact or executor should be changed in your estate plans if the chosen individual passes away before you, or if other recent circumstances (divorce, bankruptcy, a falling out, etc.) make you feel that they should not be involved in carrying out your final wishes. Be mindful not to appoint someone who could abuse this privilege for selfish reasons.

Similarly, you may want to review your list of beneficiaries to ensure that your selections reflect your current circumstances. For instance, if you are recently divorced, you should review your will and change anything that may be associated with your ex-spouse and their family.

4. Make sure you’ve appointed a legal guardian for any minor children.

No parent wants to think about what would happen if they pass away or become incapacitated while their child is still a minor. However, this is precisely why naming a legal guardian in your Will is so important.

Typically, if you die before the child turns 18, your child’s other parent becomes the legal guardian and assumes responsibility for that child’s care and well-being. If you both pass away (or if the other parent is not involved in your child’s life), naming a legal guardian or guardians in your Will ensures that important decisions about your child’s future are not left to a court or Department of Social Services.

5. Consider the potential tax implications of the Biden administration.

Under Biden’s presidency, there will likely be some new tax implications for estates. The incoming President plans to return to a reduced exclusion amount, which would subject a significantly increased number of estates to taxation.

Additionally, Biden proposed an elimination of the “stepped-up basis.” The current stepped-up basis allows assets to rise to the current market value before being passed on, so heirs can sell the inherited assets with minimal to no income tax. Under Biden’s proposed change, however, those who inherit assets (like a house) will have to pay increased capital gains taxes. You’ll want to keep these changes in mind when preparing or updating your estate planning documents.

6. Review your entire estate plan and consider whether you need to make any changes.

Your life circumstances can change a lot in a few short years, so be sure to review your entire estate plan and consider whether you need to make any changes, especially if you have not done so recently. When making these updates, ensure that all your retirement accounts, joint properties, life insurance, and beneficiary designations are recent.

Get help keeping your estate planning resolutions.

The best way to keep your 2021 estate planning resolutions is to work with a knowledgeable estate planning attorney. The Law Office of Patricia E. Tichenor, P.L.L.C. has 20 years of experience serving the needs of Virginia families, and we can help you with creating or updating your estate plans. Contact us today for a free consultation to learn more.

The Law Office of Patricia E. Tichenor, P.L.L.C.
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