You May Want to Consider Holding Power of Attorney for Your Adult Child

You May Want to Consider Holding Power of Attorney for Your Adult Child

You May Want to Consider Holding Power of Attorney for Your Adult Child
NOVA Estate Lawyers – Leesburg

Your child is always your child, except in the eyes of the law where an 18 year old is considered to be legal adults. However, as many parents know, at this age, or even beyond, many children are still not ready to be on their own and may need your input or assistance in major life decisions or managing finances. Even though they may be off to college, or entering military service, and you still may be paying their way, you may not have any say in their affairs should something happen and they need your help.

At age 18, children are also deemed emancipated for HIPAA purposes. This means that their privacy is protected under the law—even from their parents—unless they have a medical directive or medical power of attorney in place.

If an unfortunate circumstance should occur, as for example, your child was injured in campus violence incident or had a serious car accident, you, as parents, would have no access to health-related records, or would not be able to make decisions on their behalf if needed, unlike when they were minor children. With the increase of gun violence on campuses and distracted driving, pre-determining a plan might just help put your mind to rest, and offer protection for all parties.

Every 18-year-old needs these two essential documents

That is why we at the Law Office of Patricia E. Tichenor P.L.L.C. highly recommend creating two essential estate planning documents: a durable general power of attorney (for financial matters) and a durable medical power of attorney (for health-related matters). Encourage your child to put one in place after they turn 18, so they can ensure that you will be able to make decisions as to your child’s finances and health care in the event they are unable to do so themselves. Doing so will avoid the greater expense, stress and delay, if they are not in place, of seeking those rights for your child through a guardianship or conservatorship proceeding in the courts. Even though you most often hear about these two documents for older people, they should be considered for younger folks as well.

A financial power of attorney can be customized to your child’s needs, general (covering all financial matters) or specific (relating to just one aspect of the adult child’s finances). Your child can appoint these responsibilities as well to different family members or trusted advisors as alternates or successors to you.

A power of attorney can be useful in other ways too, such as if your child is traveling abroad and requires money wired from the adult child’s bank account, or needs to have legal documents like a lease signed in the child’s absence. The small fee you pay to set up proper powers of attorney will be well worth it in the end.

Contact your estate planning attorney

At the Law Office of Patricia E. Tichenor, P.L.L.C., we are specialists in estate planning and can help you protect your family members. Please call to set an appointment at our convenient Northern Virginia office with either Patricia Tichenor or Camellia Safi, attorneys at law.

Estate Planning When You Own a Business

Estate Planning When You Own a Business_NOVA Estate Lawyers - Leesburg

Estate Planning When You Own a Business
NOVA Estate Lawyers – Leesburg

When you own a business, a large part of your family’s income and wealth is most likely tied up in the business. Therefore, you need to plan what will happen to that business following your becoming incapacitated or your death. This type of estate planning is often called succession planning.

You may want to keep the business running within your family. You may want to sell it at a fair price and split the profits, either before or after you pass away. Or you may want to ensure that the business passes along to existing co-owners. No matter which outcome you choose, planning ahead will help your business survive and aid in preventing large or unexpected tax liabilities.

Without proper planning, even if the business should die along with the owner, estate taxes can still be owed. This type of tax, known as the IRS’ death tax, can range from 35% to 50% of the business value, and is due within nine months of the death. Lack of liquid funds can result in the sale of a business at far below its actual value.

Your estate plan for business succession takes careful preparation, especially if it is owner-dependent, as with many professional practices. You must consider the systematic transfer of management, assets and ownership, and answer questions like “Who will own the business.”

If the business has co-owners, partners or shareholders, you might want to establish an agreement that the remaining owners automatically purchase the shared interest in order to avoid family members from taking interest. It can also establish a sale price and allow or disallow partners to purchase your share. This is known as a buy-sell agreement.  Funds to purchase shares of an existing business often come from life insurance, and an irrevocable life insurance trust (ILIT) can be created to provide funding for the buy-sell agreement.

For a family-owned business, decisions as to which family members will inherit and run the business need to be made, and questions like “If two children will be involved in the business and one will not, should the assets be divided equally?” should be answered.

One of the main reasons for creating a succession plan for your business is to avoid probate and minimize estate tax burdens. You may want to establish a trust that transfers your business assets to your family members or partners while still providing you with an income. This is known as a grantor-retained annuity trust (GRAT) or grantor-retained unitrust (GRUT). Or you could establish a family limited partnership to hold the business assets. Because the rules for establishing trusts are complex, it is always best to consult with your attorney.

Contact Your Estate Planning Attorney

Creating any estate plan takes time, and it is never too soon to set a succession plan into place, especially since death could happen unexpectedly. That is why you need to talk to an estate planning attorney like Patricia Tichenor or Camellia Safi at The Law Office of Patricia E. Tichenor, P.L.L.C. Located in Reston, and serving clients throughout Northern Virginia, we can help you create an estate plan to ensure proper succession of your business and your assets. Contact us today.

The Act of Revoking or Changing a Will

The Act of Revoking or Changing a Will

The Act of Revoking or Changing a Will
NOVA Estate Lawyers – Leesburg, VA

Once you have prepared your Will, whether through a trusted attorney or by using an on-line software program, there may come a time when you need to update or change it. Since life is never stagnant, you should ensure that any life changes appear in your Will so that your wishes are carried out following your death.

It is not unusual for people to try to make changes to their Will simply by hand-writing on their existing Will, or typing up a short, separate letter to put with their Will. Unfortunately, these methods of making updates or changes are not only unlikely to be unenforceable, but, in the worst-case scenario, they may actually result in your invalidating your existing estate plan in its entirety.

Even if you use an attorney and have them prepare a Codicil to your existing Will, this separate document that adds to or amends the terms of your Will is often misplaced or lost by the time of your death. This is why it is often better to have a new Will prepared and signed which revokes your existing Will, thereby ensuring that your most current plans or wishes are honored. A Codicil is also best used when there is not enough time to prepare and sign a new Will and only so long as very small or simple changes are to be made. A new Will that clearly states your intention to revoke all prior Wills will cancel your original Will.

Can a Power of Attorney Change a Will?
If you have issued Power of Attorney to someone, they are not granted the right to change your Last Will and Testament, although they may be able to do damage to your estate by liquidating or moving assets you intended to pass along to your beneficiaries. To prevent this, you should consider appointing more than one person to serve as your financial Power of Attorney and specify that they must act either unanimously or by majority when it comes to determining your affairs. If abuse is suspected, your loved ones can file a case for breach of fiduciary duty with the courts, but that does not ensure that your beneficiaries are able to recoup the value of missing or mishandled assets. This can be especially difficult where transfers involve real estate holdings, stock, or even family heirlooms.

Reasons to Change your Will
Both your circumstances and the law can change, and this may trigger the desire to make changes to your Will. In addition, you should periodically review your estate plan (Will and Powers of Attorney) to ensure that your current circumstances and goals are properly addressed. Such changes can be triggered by new or changed relationships as a result of a divorce, re-marriage, birth or adoption of a child, emancipation of a special needs child, disability of yourself or a beneficiary of your existing documents, or a newly-acquired asset including money and real estate. In addition, obtaining guidance on how to avoid probate for assets that you may wish to pass outside the terms of your Will can be invaluable advice when updating your estate plan.

Contact Your Attorney
To create a legal and binding Will, to make changes to an existing Will, or to prevent eventualities that may impede your ability to pass along your assets to your beneficiaries, it is always best to consult with an Attorney. At the Law Office of Patricia E. Tichenor, P.L.L.C., attorneys Patricia Tichenor and Camellia Safi are specialists in the area of estate law and can assist with all matters concerning Wills, Trusts, and Estates. Contact us today.

Choosing a Power of Attorney

Choosing a Power of Attorney

Choosing a Power of Attorney
NOVA Estate Lawyers – Leesburg

Quickly defined, a Power of Attorney (POA) is a powerful estate planning tool that allows you to appoint a spouse, trusted family member, or friend to assist with handling your financial and medical affairs during a period of disability when you might not be able to do this for yourself. This person may be referred to as your attorney-in-fact or agent. Your agent may be given these powers immediately the day you sign your POA, called non-springing, where you believe any delay to obtain a finding of disability by a doctor would be create greater problems or, instead, as springing powers granted only when one or two licensed physicians determine in writing that you no longer have the capacity to manage your financial or medical care decisions.

A Power of Attorney is a binding legal agreement that must be put into writing, witnessed, and notarized to become valid. For purposes of a financial POA, you must also make it clear, in writing, whether you are giving your agent permission to access and handle all or only some of your accounts for the POA to hold up in court.

You do not have to choose the same person as your agent for financial and medical matters; however, they do need to work together to make decisions on your behalf, according to your wishes. For instance, if you need medical treatment, your financial POA must work together with your medical POA to disclose financial information, fill out forms, or provide funds.

What’s important to keep in mind is that, absent a POA, if you become disabled and no longer have the capacity to handle your finances or make your own medical decisions, there will be delays and greater legal expenses incurred for a member of your family (perhaps even someone you would never choose for the job) to petition a court to be appointed Conservator of your assets or Guardian of your person. It is not unusual even in an uncontested matter for the costs to equal ten times the amount it would cost to simply retain an attorney to prepare a well-written POA to address these matters now before the worst happens.

Choose the Right Person for your Power of Attorney

Choosing the right person is of paramount importance. Select someone you can trust, who has your best interests at heart. Do not select someone who has had legal issues in the past or a person with whom your family does not get along. You may want to discuss your choice of person with your family before signing any documents, but this is not necessary. There are, of course, exceptions to this general rule, including same-sex couples and unmarried couples who may want their partner in the driver’s seat even if their family does not like or approve of the partner.

It is absolutely critical that you designate a person who is capable of handling your affairs and ensuring that the provisions of the POA you sign do not open the door for abuse by someone to benefit himself or herself over (which you should be their first priority) as well as your other family members by engaging in self-dealing behavior with your assets. They must fully understand their duties and be committed to taking them seriously. It is, therefore, recommended to talk to the person(s) you designate to discuss what you expect, and disclose the scope of your affairs before signing any documents. Note whether this person will charge a fee for their services; family members generally do not, but professionals like accountants and attorneys usually do.

You may also want to select a second person to serve as your secondary Power of Attorney in the event that your first choice cannot or will not perform their responsibilities, or passes away.

What if I Want to Change my Power of Attorney?
You may at any time change your assigned Power of Attorney by using a Revocation of Power of Attorney document and creating a new POA document, as a new POA document typically provides for revocation of all prior documents upon signing it. Shredding your older POA after signing a new one is absolutely critical to ensure that only the most current POA is found and utilized in the future.

Consult Your Attorney

Selecting your Power of Attorney may be one of your most important life decisions, so your choice should be considered carefully. Attorneys Patricia E. Tichenor and Camellia Safi at the Law Office of Patricia E. Tichenor, P.L.L.C., specialize in Estate Planning issues and can assist in creating the legal documents you need. Please contact us today.

Modifying Your Estate Plan: How and When To Do It

Modifying Your Estate Plan: How and When To Do It

Modifying Your Estate Plan: How and When To Do It
NOVA Estate Lawyers – Leesburg

Congratulations for setting up your estate plan. You have taken the right steps to insure that your estate is distributed as you wish following your passing. But how long ago did you create this plan? If it has been longer than three to five years ago, you might want to look at modifying it.

Life is never constant. Things can change in an instant, and circumstances in not only your life but in those of your beneficiaries surely change over time. That is why you must set periodic reviews to keep your estate plan up to date, and make changes should a significant life change event occur.

When to Modify Your Estate Plan
Common events that can change the directives in your estate plan include, but are not limited to:
• Divorce, separation, death of a spouse, marriage or remarriage
• Death of a beneficiary—family or friends
• Death of a family member from whom you might inherit
• Birth or adoption, or emancipation of a child; guardianship issues
• A child who may suffer from a disability, including drug addiction
• An elderly parent becoming steadily incapacitated due to illness or injury, to avoid the cost of a guardianship/conservatorship court case
• Your own health issues
• Starting or closing a business
• Acquisition or loss of assets
• Changing your mind

How To Make Changes
The most common way to alter your estate plan documents that can include your Last Will, Living Will, Trust or Power of Attorney is through a Codicil to Will or Living Trust Amendment. These documents replace old clauses in your will with new ones. In some cases the change involves only a simple amendment to existing documents, while at other times, an entire rewrite may be necessary. Your estate attorney will assist you in creating and filing the appropriate documents.

Overall, the best strategy is to review your estate plan at regular intervals, and update it should a significant event occur. This will ensure that your estate, and your legacy, will pass on as you planned as smoothly as possible.

For Questions About Modifying Your Estate Plan, Contact the Law Office of Patricia E. Tichenor, P.L.L.C.
To modify your existing estate plan, or to create a new Will, Living Will, Trust, Power of Attorney or any other estate document, contact estate planning attorneys Patricia Tichenor or Camellia Safi at the Law Office of Patricia E. Tichenor, P.L.L.C.

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