Estate Planning During COVID-19: 4 Areas to Address

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Estate Planning Considerations During COVID-19 | NOVAEstateLawyers.com

The COVID-19 pandemic has raised a lot of valid fears about health and mortality. Simple errands like going to the grocery store and visiting a doctor’s office have created a potential risk for picking up and transmitting a virus that has killed nearly 90,000 Americans so far.

As the coronavirus death toll increases across the country, getting sick – and thinking about what might happen to your loved ones if you pass away – may be weighing heavily on your mind. During quarantine, one productive thing families can do is be proactive about updating their estate plans.

If you do not already have an estate plan, or haven’t updated yours recently, now is the time to tackle this uncomfortable but important task. Here are some important areas to address as you work on estate planning during COVID-19.

1. Your wishes for medical decisions

If you become critically ill, with COVID-19 or any other condition, your loved ones may be faced with some difficult decisions about your healthcare. Medical estate planning documents like a Health Care Directive, a Durable Medical Power of Attorney (POA), and a HIPAA Authorization can make these decisions easier by documenting your wishes for medical treatment.

In the event you become physically or mentally incapacitated and cannot make decisions for yourself, your healthcare providers and your family can refer to these documents and make the choices you would have made if you were able.

2. Management of your finances

Having a Durable General (Financial) POA serves the same purpose as a Healthcare POA, but for decisions regarding your finances. The person(s) you name to serve as attorney-in-fact under your Financial POA (who can be the same person(s) as your Medical POA) will be responsible for making financial choices, ensuring your bills are paid, and managing any investments or business finances you may have in the event of your incapacitation or death.

3. How your assets will be distributed to your beneficiaries/heirs 

There are three primary ways to transfer property to beneficiaries:  Using payable or transferable on death designations (POD or TOD), having a trust plan to avoid probate, or relying upon a will, where your assets will pass to your named beneficiaries under the supervision (and expense) of the probate court. While you can designate that all your assets pass through your Will, it may be the most ideal way to do so – both because of cost, delay, and lack of flexibility.  It may, therefore, be in your family’s best interest that you set up a revocable or irrevocable trust plan depending on your overall estate planning goals and needs. When properly drafted, a trust allows your family to avoid probate, reduce your taxable estate in some instances, protect legacy gifts for the family like a vacation spot for use by multiple generations of the family, and expedite the inheritance of certain assets. This can ultimately save your loved ones time and money.

A revocable living trust in particular is ideal for individuals who want the flexibility to make changes to their estate plans as their life circumstances and wishes change. Additional benefits of using a trust include family privacy (probate court proceedings are part of the public record, while trust documents can only be accessed by your named beneficiaries) and easier, most customized management of assets being inherited by minor children.

4. What happens to your minor children

If you have minor children, your estate plan should include a legal guardianship designation to ensure they will be taken care of in the event that you become ill or pass away. If your child’s other parent survives you, they are typically first in line to assume guardianship. However, if you are a single parent, or if your spouse also becomes ill/passes away, guardianship decisions may be left up to the Court in the absence of a named guardian.

Even if you don’t have minor children, you should be sure your estate planning documents and beneficiary forms are updated so that only the people who you wish to inherit your assets at this point in time are included.

Get virtual estate planning assistance from the Law Office of Patricia E. Tichenor

If you need further assistance with your estate planning, visit our Calendly page to schedule a free Zoom consultation call with us. During your virtual consultation with the Law Office of Patricia E. Tichenor, we will discuss and review your estate planning concerns and needs, and create a tailored strategy for moving forward.

6 Questions to Ask Yourself as You Make Your First Estate Plan

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First-Time Estate Planning Questions | NOVAEstateLawyers.com

An estate plan ensures your loved ones and assets are taken care of if you become incapacitated or pass away. While it’s not exactly an uplifting task, it’s important to plan ahead so your loved ones aren’t caught off-guard or left to sort through your affairs on their own.

However, thinking about your final wishes, especially at a young age, can be overwhelming. To help make the process of developing your first estate plan easier, here are six essential questions to ask yourself.

1. What assets do I have?

Assets come in two forms: tangible and intangible. Having a list of your assets is an imperative part of the estate plan execution process, and as you create your plan, will help you answer important questions. Your assets may include: checking accounts, savings accounts, a life insurance policy, 401(k) or other retirement accounts, a business you may own, copyright or trademark, real estate, vehicles (including boats, trailers, motorcycles, etc.), valuable heirlooms or antiques, and social media or digital assets.

2. Who do I want as my executor?

Your executor is the person responsible for carrying out your final wishes set forth in your Will after you die. The key consideration in selecting an executor is whether they are trustworthy and well-organized. While some people name a close family member, like a spouse or adult child, you can also choose a trusted friend or a professional (e.g., a lawyer, CPA, financial planner or even a bank) to serve as your executor. A person who will fulfill your intended wishes with respect to your estate plan would be a good choice.

3. Who should I designate as my attorney-in-fact under a POA?

As with an executor, the attorney-in-fact (commonly referred to as “your agent”) named in your power of attorney (POA) should be someone you know and trust. For each type of POA, one for your financial matters and another for your medical matters, the person you choose will be responsible for properly managing all of your financial affairs or potentially making life-changing medical decisions for you if you lose the capacity to handle those matters on your own due to severe illness or injury.

Serving as an attorney-in-fact under a financial POA is a big responsibility, so choosing someone who is financially sophisticated and well-organized is key. Choose carefully a trusted friend or family member for this role who will not feel overwhelmed by handling your affairs, or consider naming more than one friend and family member to serve as co attorneys-in-fact so that they can share the various duties that will fall upon them under you POA.

4. Would it be better to transfer my assets using a Revocable Trust rather than using solely a Will?

The decision to pass your assets to beneficiaries through a trust or a Will depends on which assets you own and their nature. It also depends on your overall planning goals.  Trusts offer a lot more flexibility and options for planning than a traditional Will, such as holding title to your residence so that, after your death (and your spouse’s if applicable), the home can be maintained for the benefit of your children who might need or want to continue to reside in the home after your death with your named guardian, or having the children’s inheritance managed over a longer period of time with specific ages for when a child will receive outright distributions of his/her inheritance.

Depending on what property is held in the trust, your family may be able to avoid probate administration for these assets upon your death.  Trusts also help you maintain a certain degree of privacy, whereas what passes through your Will and probate of that Will is a matter of public record.

5. What are my healthcare wishes?

In the event you become too ill to make your own healthcare decisions, listing your healthcare wishes in an estate plan will ensure you get the care you desire. To begin listing your healthcare wishes, make a note of the type of facility you’d like to live in, such as your home or a hospice and palliative care center.  Investigate pros/cons of purchasing a long-term care insurance plan depending on any history of dementia, Alzheimer’s disease or another degenerative neurological disease.

6. Should I discuss my plans with my family/loved ones?

Depending on your age and medical condition, it may be best to share your estate plan with your family/loved ones rather than simply placing somewhere secure in your home or in a safe-deposit box. At the very least, even if you are not comfortable sharing copies of your signed documents with them, consider giving them a heads-up if they have been appointed to the role of attorney-in-fact or executor, and where to locate your documents should something occur with your health or should you die. Ask them if they are comfortable with the arrangements you want to make, and have discussions outlining their potential responsibilities.

The Law Office of Patricia E. Tichenor specializes in all aspects of estate planning, including providing clients with invaluable free legal guidance on how to avoid probate using trusts, POAs, deeds, as well as key guidance on issues involving special needs trust planning, guardianship and conservatorship for Virginia residents.  For assistance with creating your first estate plan or updating an existing one, contact us today.

Can I Disclaim My Inheritance?

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How to Disclaim Your Inheritance | NOVAEstateLawyers.com

In most cases, when a loved one leaves you something in their Will or Trust, it’s an honor. However, that doesn’t always mean you’d like to inherit the property or assets passed down to you.

There are plenty of valid reasons to disclaim your inheritance, and with the proper legal documentation, you may refuse assets left to you by a loved one who died with a valid Will or Trust, or even if you are an heir-at-law when someone has died without a Will or Trust. Here’s what you need to know about using a qualified disclaimer.

 

Why would you want to disclaim your inheritance?

You can disclaim a gift or inheritance for any reason, but here are a few of the most common:

  • Inability to maintain the assets left to you. If a loved one left you a sizable asset, such as real estate or a vehicle, you may not be in a position to maintain or manage that asset, even if you planned to sell it. In this case, you may wish to disclaim that asset, so it goes to other named beneficiaries or heirs who are more equipped to handle the situation.
  • Reducing your taxable estate. This is not a likely scenario for most individuals, but in some cases, inheriting assets from a loved one can put you over the federal thresholds for estate tax if you die after inheriting from someone and the inheritance is counted as part of your estate, or trigger hefty inheritance taxes by the local State taxing authorities where you reside. Note – not all States have an inheritance tax, so it is helpful to determine whether you do or do not live in a state that imposes inheritance taxes.
  • Debt/bankruptcy. When a beneficiary is deep in debt or bankruptcy, any inheritance received may be claimed by creditors to cover those debts. If this is the case for you, you may wish to disclaim your inheritance so the assets or property can stay in the family.
  • Honoring the decedent’s true wishes. Perhaps you knew the decedent well and know they did not have a chance to update their Will before they died. If you are receiving an inheritance that would be more appropriate to give to someone else who was in their life, you may consider disclaiming it.
  • You believe you are too old or have an illness where you can’t truly benefit. Perhaps you feel that, at your age or in your medical condition, it is not ideal for you to be the one to inherit from a loved one’s Will or Trust, and you prefer to disclaim the inheritance in favor of other beneficiaries who need it or can make a longer-term use of the inheritance than you may be able to do during your lifetime.

This is not an exhaustive list of all possible reasons for disclaiming your inheritance. You might refuse to accept your inheritance for a variety of other reasons, or even for no reason at all. The choice is entirely up to the beneficiary.

How to decline an inherited asset using a qualified disclaimer

If any of the situations listed above (or another) apply to you, you might consider having an attorney prepare a formal Disclaimer for you and ensuring that it gets filed with the proper court and taxing authority by not later than nine (9) months after the death of the person from whom you are inheriting.  Disclaimers can be partial or full disclaimers.  However, once a disclaimer is completed, you may not benefit from that particular item of the estate (e.g., disclaiming inheritance of a piece of real estate) and you cannot change your mind after the fact. So, if you’re sure you want to disclaim your inheritance, here are the steps you’ll need to follow:

  1. Work with an attorney to have them prepare a proper, formal disclaimer/refusal to accept inheritance in writing, and be sure to sign and notarize it.
  2. Deliver your disclaimer document to the estate’s executor or trustee within nine months of the decedent leaving you the inherited assets or property.
  3. File a copy of the Disclaimer with the local county courthouse where the deceased person resided when he or she died, as well as the Internal Revenue Service (in consultation with a CPA).
  4. Once your disclaimer has been filed, do not accept, directly or indirectly, any benefits or assets from the estate you’re disclaiming. Otherwise, your disclaimer may be rendered invalid and you will be subject to any tax or legal obligations associated with inheriting.

Important nuance: Minor children can have inheritance disclaimed as well on their behalf by a legal guardian or parent; however, these disclaimers may not be legally binding in the eyes of a court unless and until the child reaffirms the disclaimer when they attain eighteen (18) years of age.

If you have any questions about how to prepare a Disclaimer or pros and cons for using disclaimers, consider hiring a local estate planning attorney to guide you through the process. The Law Office of Patricia E. Tichenor, P.L.L.C. has nearly 20 years of experience helping Virginia families with probate/inheritance matters.

Contact us today to discuss your circumstances, or schedule a virtual consultation.

How to Get Help with Estate Plans During COVID-19

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Virtual Estate Planning During COVID-19 | NOVAEstateLawyers.com

On March 30, Governor Ralph Northam joined other state governors in signing a temporary stay-at-home order for the Commonwealth of Virginia, through June 10, to fight the spread of COVID-19. Under the order, Virginia residents are not permitted to leave their homes for non-essential purposes, which would include meeting in-person at an attorney’s office to draft or update your estate plans.

Due to the rapid spread of coronavirus, the somber reality is that many people are probably thinking about their will, trusts, powers of attorney, etc. in case they contract COVID-19. However, you don’t have to take the DIY approach. My Legal Case Coach is here to provide legal support for your estate planning needs, all from the comfort of your own home.

How we are supporting clients remotely with their estate plans

During this time you can still get help with your estate planning questions or needs by scheduling a free, live video call with us. We are helping clients by Zoom to get the support they need to get their estate plan created or updated – and can very effectively do so, thanks to today’s technology.

During your free, 30-minute call, we will discuss your estate planning needs and what you’d like to update. This may include:

  • Wills – Your Will is an essential estate planning document that details how your executor should distribute your property after death. There are several different types of Wills, and we can help you determine which is the correct one for your estate to ensure a smooth probate process for your loved ones. We can also update your existing Will in the case of a significant life change.
  • Trust planning – A trust is an arrangement where one or more people, known as a fiduciary, are assigned to hold property or assets for someone else. We can help you create a testamentary trust (established through your Will) or living trust (established through a signed agreement and funded during your lifetime) to make sure your estate is handled properly.
  • Guardianship planning – Guardianship or conservatorship planning is intended to ensure the continued care of your dependents, including young children and older children or adults with special needs. In this case, your estate plan may include signing a Designation of Standby Guardian (think power of attorney for a minor child), seeking to appoint a guardian or conservator, and/or establishing a special needs trust.
  • Power of attorney – A power of attorney gives another person the legal authority to make important medical and/or financial decisions if you become incapacitated and are no longer able to provide informed consent. Without these documents, these decisions could be made by a doctor or a court-appointed agent. We can help with your power of attorney documents to ensure that these important decisions are made by someone who will act in the best interest of you and your family, including signing a Designation of Standby Guardian (think power of attorney for a minor child) to protect your children if you become incapacitated.

What if I need more help?

We are committed to serving our clients throughout this pandemic and beyond. During your consultation call, we can discuss scheduling further video meetings with principal attorney Patricia E. Tichenor to ensure that you are satisfied with your updated estate plans and to provide additional guidance on any new issues you might be confronted with as they arise.

Visit our Calendly page to get started and schedule your free Zoom call.

Your Estate Planning Checklist: 6 Steps to Get Started

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Your Estate Planning Checklist | NOVAEstateLawyers.com

Estate planning is an important process that allows you to dictate what happens to your assets in the event of your death or incapacity. While it may seem morbid to think about, especially if you’re young, it’s never too early to start creating an estate plan. Planning ahead will ensure a smooth probate (or probate avoidance) process for your loved ones and beneficiaries, and it may give you peace of mind knowing your wishes are clearly documented if something were to happen. To get started with your estate plan, follow these six steps.

1. Identify and record all your assets.

Your assets include tangible and intangible items. Tangible assets are assets that can be measured physically, such as any furniture or furnishings or other items in your home, your car, or any work tools or equipment you own. Intangible assets are not physical and may include any business licenses, trademarks, digital (social media) assets, or intellectual property you have.

2. Consider risks to assets. 

Certain assets come with risks. For example, if you own a home and you have overdue mortgage payments and property taxes at the time of your death, your estate will need to have sufficient funds to settle those debts. Take a look at your asset list and consider what you can do to mitigate risks that could come from them.

3. Protect your loved ones and name your beneficiaries. 

There are several estate planning arrangements you can put into place to ensure your family and loved ones are provided for in the event of your death. If you are a single parent of minor children, you’ll want to appoint a legal guardian and set up a trust plan (as part of a Will or separately, depending on your goals) in order to provide financial security for them until they reach adulthood. Even if you are married to your child’s other parent, it’s a good idea to name a successor legal guardian to your spouse in the unlikely event that both you and your spouse die before your children have turned 18 years of age.

This is also a good time to think about what assets you want to be passed on to your family and friends. Go down your list of assets one by one and decide on your beneficiaries. Some individuals choose to leave their entire estate to their spouse and children, while others divide up their estate and leave certain assets to specific heirs.

4. Choose your power(s) of attorney. 

Choosing an agent or attorney-in-fact to administer your financial and medical powers of attorney (POAs) is one of the most important parts of the estate planning process. Your agent should be someone you trust to make the best decisions on your behalf, as they will be responsible for your financial and medical decisions should you become incapacitated or are otherwise no longer able to make these important choices for yourself. You can use the same person (your spouse, for instance) or different people to serve in these roles, or perhaps name co-agents depending on your goals.

5. Review local and federal estate tax laws.

If you have a particularly large estate, your executor may be responsible for paying federal estate taxes. To help ease the burden of these expenses, your estate plan should include a review of current federal estate tax laws to determine your estate’s liability. Depending on where our beneficiaries reside at the time of your death, you may also want to brush up on the state inheritance tax laws where your beneficiaries reside.  While Virginia does not impose inheritance taxes on residents who live in Virginia when they inherit, a handful of other states do.

6. Hire an estate planning attorney to help. 

Due to the complexity of estate planning, it’s always wise to contact a professional for help. To get started with your estate plan or update your current plan, contact the Law Office of Patricia E. Tichenor, P.L.L.C. Our firm has nearly 20 years of experience helping Virginia families with creating and updating their estate plans.

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