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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

5 Estate Planning Tips for Single Parents

NOVA-Estate-Lawyers-Tichenor_Estate-Planning-and-the-Single-Parent

Estate Planning and the Single Parent |
NOVAEstateLawyers.com

While estate planning is important for every parent, single parents face unique challenges when planning for their children’s future. As the primary caretaker for your children, you need to plan for several scenarios to ensure they have the proper safeguards in place. No matter how large or small your estate is, it’s important to protect it for your children.

An experienced attorney can walk you through the processes of how to protect your children’s family home or other assets you’ve built up from probate and other taxes, as well as from predators who can steal from your unsuspecting children. These five estate planning tips for single parents will make sure your children are properly protected in the event of your death or incapacitation.

1. Create a Will and/or trust.

No matter what your family situation, step one of proper estate planning and understanding the unique considerations that come with having a child, especially a minor, inherit from you.  Avoiding probate is just one consideration.  Knowing how to protect what your children inherit from your creditors and to stagger distributions to them to ensure they don’t squander their inheritance or become vulnerable to manipulation by others is another.  A Wil is not the best answer in these situations.  It may be far better to set up a trust – especially if you own any real estate.

By setting up a trust for your minor child(ren), the assets you leave behind, including your family home, can be maintained (if desired) or otherwise managed by a trustee.  The assets of the trust can provide ongoing financial support for your minor child in a structured and safe manner.

Trusts can also protect children after they turn the legal age of 18. Even though they are now considered adults, they may not have the knowledge, skills, or maturity to properly manage their inheritance. Your trust can designate yearly funds or delay inheritance of the entire estate to a later date.

2. Designate a legal guardian.

As a single parent, it’s essential to designate a trusted, responsible adult to take physical custody of your minor child(ren) if you die before they reach adulthood. If you have sole custody and pass away without choosing a legal guardian, your child’s other parent (if still living) may automatically be given custody, which may not be in the best interest of the child if the marriage dissolved due to abusive issues, a criminal record or homelessness.

When you’re choosing a guardian, remember that it does not have to be the same person who’s managing the trust on behalf of your child(ren). Sometimes it’s wise to have different people managing money and children, as they have different skills and qualifications. One may be better at parenting, while the other is a whiz at financial investing. If two people are designated, they will need to work together in the best interests of the child.

Some items to consider when designating a guardian include:

  • Whether your child should receive an allowance.
  • Whether the guardian should move into your home to care for your children, and if so, what is their legal responsibility for care of the home?
  • Whether the guardian will be compensated.
  • Religious concerns.
  • Whether the person you want to be the guardian will accept the responsibility. Always ask before designating anyone.

3. Plan for incapacitation.

Another scenario single parents must consider is what should happen if they become incapacitated. When planning for incapacitation, you may name an attorney-in-fact or agent under a durable general power of attorney to make financial and health care decisions if you are unable to do so. Designating such a person allows them to make financial decisions for you, including using your funds to support your children or maintain their family home during your incapacity.

4. Consider life insurance.

To help ensure their children have financial support after their death, a single parent should consider investing in additional life insurance or increasing the death benefits under an existing policy. However, you should not name a minor as a beneficiary to an insurance policy, as life insurance companies will not pay proceeds to minor children. Instead, it is best to create and name a trust as the beneficiary of your life insurance, and then your trustee can manage the assets on behalf of your child(ren). This also avoids a separate, lengthy and expensive court process to appoint a guardian to manage these assets for your child(ren).

5. Speak with an experienced estate planning attorney.

If you are a single parent ready to secure your child’s inheritance, speak with an experienced estate planning attorney about your options. Schedule a free, 30-minute consultation with the Law Office of Patricia E. Tichenor to discuss your Virginia estate planning needs, including Wills, trusts, and guardianship plans.

What Is a Revocable Living Trust and Do You Need One?

revocable living trust

What Is a Revocable Living Trust? | NOVAEstateLawyers.com

There are several different legal mechanisms that allow you to pass your estate on to your loved ones after you die. Many people opt to draft a Last Will and Testament. However, estate death taxes and other considerations can complicate things for families.

While increases in exemptions from estate death taxes have worked in the past for some families, there are alternatives to consider. Revocable Living Trusts, for example, can guarantee a smooth passage of property from decedent to beneficiaries.

A will vs. a revocable living trust

A will is a legal document that details your wishes regarding the distribution of your property and the care of minor children upon your death. Generally speaking, this document outlines which money and assets go to which beneficiaries, who will become your children’s legal guardian (if applicable), and who is in charge of managing your affairs. When you die, a probate court uses your will to help your executor distribute assets and settle any debts that are owed.

Like a will, a revocable living trust is an estate planning tool that determines who will inherit your property. However, instead of waiting until your death and having your beneficiaries go through the expensive probate process to inherit your assets, you can leverage a trust to transfer certain property to a trustee during your lifetime.

Depending on what property is held in the trust, your family may be able to avoid probate administration for these assets upon your death. This is because the trust is considered to be a separate entity that “owns” the assets within.

Most individuals who create a living trust will serve as both the trustmaker (also called a grantor) and the trustee, or the person in charge of managing the property held in the trust. Upon your death, the assets will simply pass to another trustee of your choosing – no probate administration required. The “revocable” aspect of a trust means you can adjust and change the details as your life circumstances or wishes change, making it a very flexible estate tool.

It’s important to note that a revocable living trust is not an alternative to a will. Instead, it’s a planning tool that should accompany a last will and testament.

The benefits of a revocable living trust plan

There are several overall benefits to adding a revocable living trust to your estate plan:

1. Avoid probate

One of the most important benefits of a trust is avoiding probate on those assets, which can save your loved ones time and money. This can also be helpful if you own assets in more than one state/jurisdiction, as your out-of-state property would be subject to the local probate laws.

2. Maintain privacy

Wills are public documents that can be read by anyone once they’re processed through the courts. No one except your named beneficiaries can read a revocable trust planning document.

3. Manage assets for minor children

If you have minor children, a trust can ensure their inheritance 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 through a child’s estate plan should the child inherit from you outright.

4. Ensure your wishes are met if you become incapacitated

One of the important mechanisms of a revocable planning trust is to plan for what happens to your estate, and how you’re treated, should you become mentally incapacitated. Your document can specify how you are determined to be mentally incapacitated and appoint who manages your finances. A will can’t directly specify this.

5. Potentially reduce your estate taxes

Transferring assets to a trust can reduce the size of your taxable estate, which will ultimately save your family from paying higher estate taxes. While most estates aren’t large enough to be impacted by the estate tax (for tax year 2019, the estate tax exemption is $11.4M per individual and $22.8M for married couples), this is an important consideration if you have assets valued above these limits.

Which is right for you?

Not every individual needs a revocable living trust, so it’s important to assess your needs to determine the right course of action. However, if you have minor children, or you are concerned about how your finances will be managed, how your estate will be transferred and who should take care of you in the event of mental incapacitation, then a revocable living trust is a good addition to your will.

Have questions? Contact an experienced estate planning attorney.

While a will is important, a revocable living trust plan can provide you with more options and security. It’s worth looking into with your estate planning attorney.

At the Law Office of Patricia E. Tichenor, P.L.L.C., we specialize in estate planning, probate, and family law for Virginia residents. Contact us today to start planning for your family’s future.

You’ve Been Named as Estate Executor – Now What?

last will and testament document

An Overview of the Virginia Probate Court Process – NOVAEstateLawyers.com

If you’ve been named as executor of your loved one’s estate, you will serve a key role in the probate court process, which is how assets of a deceased individual’s assets that pass through a will reach any named beneficiaries therein.

Probate is necessary to ensure, first, that a decedent’s final debts and expenses are paid, and, second, that the beneficiaries named in the will receive their inheritance. Under court-supervision, an executor is responsible for overseeing this process.

Executorship is a big responsibility, and it can seem especially overwhelming during this already difficult and painful time for you and your loved one’s other living relatives. This step-by-step guide will help you understand the probate court process in Commonwealth of Virginia, including the initial forms to file and how to prepare for your meeting with the probate court clerk.

Note: This guide covers the basic probate process when the decedent (deceased individual) left a valid last will and testament. If your loved one died intestate (without a valid will), you should consult with an experienced probate / estate planning attorney for specific guidance related to your particular matter to understand the probate process for an intestate estate.

1. Determine which court forms you’ll need and where to file them.

With a few exceptions, Virginia’s probate process is controlled by required PDF court forms issued by the Virginia Supreme Court.  Some Circuit Courts also have their own customized, specific forms for their local Court, so it is always smart to contact your local Circuit Court to ask for any specific website address that they may have to link you to their local forms.  In Virginia, Probate Matters are under the supervision of the Circuit Court in the city or county where the decedent resided at the time of his or her death, especially if they owned property in that city or county.  However, if they did not own any real estate and died in a hospital, then there may be grounds to file for probate in the city or county where they died. Each Circuit in Virginia has an arm of its court called a Commissioner of Accounts, who handles the ongoing supervision of the filings with the Court.

If your loved one owned more than one residence in Virginia, you’ll file in the local court of the city in which they last resided. You’ll also need to record a certified copy of the original will in the city or county where their other properties are located.  However, real estate itself does not go through Probate automatically in Virginia, and it is prudent to contact an experienced Probate attorney to determine how to handle any and all real estate of the decedent before you file anything with a local Circuit Court related to the probate process.

After you consult an attorney, to ensure you know the right next steps and what asserts will actually need to be reported to the Circuit Court, you (or your attorney) locate the applicable “Forms for Decedent’s Estate” on the appropriate local Circuit Court’s website needed to begin the qualification process to serve as Executor and prepare for the initial reporting process for the assets that will flow through your loved one’s Probate Estate.

While there are several optional forms you can file (including a waiver of executorship affidavit, if you wish to decline your duties), the most common forms you initially need to prepare are as follows:

  • Probate Information Form
  • List of Heirs
  • Notice Sent to Heirs and Beneficiaries
  • Probate Tax Return Form

You will need to prepare the forms above before your first meeting with the probate clerk at the Circuit Court where you are filing (see Step 2).  Some local Courts, like Fairfax Circuit Court’s Probate Division, will actually help you with all these forms as long as you call them to schedule an appointment with their office.  Appointments can take 2 months or longer to schedule as this Court is one of the busiest in the Commonwealth. This is why it is best to contact the local Probate Clerk of the Circuit Court where you believe you will be filing to ask them about their specific process and how soon you may schedule a qualification meeting with them.

2. Schedule a qualification meeting with the local probate clerk.

Once you have completed the forms from Step 1, you will attend an initial qualification meeting to be sworn in by the Probate Clerk to serve as Executor for the Estate.  You may also need to obtain a bond, if bond has not been waived in the Will or if you are not a resident of Virginia, so make sure you know what is expected of you by the Court before this meeting (see Step 3). You also must bring a valid driver’s license or passport as well as your checkbook to pay any applicable filing fees and initial probate taxes. Once you are qualified, you can then reimburse yourself from the Probate Assets that you will be located, depositing, and managing under a new bank account called a Probate Bank Account.

3. Apply for a probate bond and appoint a local registered agent (if you’re a non-Virginia resident).

If you plan to be the Executor of an estate but are not a resident of Virginia, you must apply for a probate bond, which is local insurance company that guarantees your services Executor.  You’ll also need to appoint a Virginia resident to serve as a local registered agent for you, using a Consent of Non-Resident Fiduciary form.  Sometimes, if you hire a local Virginia attorney to help you, they can agree to serve as your local agent in Virginia for this purpose.  Be aware that if you are a convicted felon or have filed for bankruptcy, you may not qualify for a bond and may also have to resign to serve as the Executor in favor of one of the alternate Executors named in your loved one’s Will.

4. Get a tax identification number from the IRS and set up a probate bank account.

At the end of your initial qualification meeting, the Court will issue you what is known as a Letter of Appointment (once known as Letters Testamentary).  You should obtain at least 6 certified copies of these in addition to the 2 free certified copies given to you by the Court, because you will need to provide them to banks, taxing authorities, and more during your service as Executor.  You will then be able to go to IRS.gov and obtain a tax identification number called an EIN that you will use to open up the Probate Bank Account in which to manage all the cash assets of the Probate Estate.  You cannot open such an account without the EIN.  This account will be used to pay debts and other estate-related expenses. Any remaining money will eventually be transferred to the beneficiaries from this account.

5. Determine whether you need to file additional forms based on the size of your loved one’s estate.

During Step 1, you may learn that the Estate you are handling qualifies for something called Expedited Probate (e.g., you are the sole beneficiary-surviving spouse and Executor, and assets passing to you thru the Will are $25,000 or less in value) or  Small Estate Treatment (e.g., asset involve only bank accounts valued at less than $50,000). If the decedent’s estate does qualify for such treatment, you will be done with Probate. You may simply need to fill out a special affidavit form to complete the court process.

If your loved one died with a larger estate, there will be several more steps and forms to file. At this point, we highly recommend speaking with an experienced estate planning attorney to help you complete the probate court process.

Your attorney can guide you through the remaining steps you’ll need to take as an estate executor and potentially help you reduce probate costs. He or she can also help you fill out the proper forms for your situation and keep the process moving to ensure your loved one’s estate distributions are handled efficiently.

Our law office can help with your probate court matter.

The Law Office of Patricia E. Tichenor, P.L.L.C. been serving the Estate Planning and Probate needs of Northern Virginia families for more than 15 years. Contact us today for guidance on honoring your loved one’s wishes as the executor of their estate.

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.

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