Don’t Let Errors Derail Your Retirement Income Plan

Don’t Let Errors Derail Your Retirement Income Plan NOVA Estate Lawyers – Leesburg, Virginia

Don’t Let Errors Derail Your Retirement Income Plan
NOVA Estate Lawyers – Leesburg, Virginia

When people talk about retirement income planning, they are most often referring to the assets they have in their IRA and 401(k) plans, and how they will withdraw that money, transfer it, or move it from place to place.

What they need to be careful of, however, is doing it properly. If done incorrectly, it could cost a person dearly in taxes. Here are some points to remember:

Remember Required Minimum Distributions

When taking IRA distributions, a minimum withdrawal is required once a person reaches an age that is six months past his or her 70th birthday. The penalty for not taking enough out is substantial: it can cost 50% on the under-distributed amount.

Defer Taking Inherited Money
When inheriting money, one might be tempted to take the money in cash, but that is not the best solution. It is better to spread out distribution of that money over a term of several years. This will ease the potential tax burden and create a stream of income.

Heed Deadlines when Transferring Money

When the lure of a higher interest rate or can’t-pass-up opportunity arises, people should be careful about how they transfer their assets. If they transfer funds themselves, by taking a distribution from one savings plan and rolling it into another, they must complete the transaction within 60 days of the distribution or risk a 20% mandatory withholding on the amount withdrawn, a penalty for early liquidation of the account. This penalty is collected by the retirement plan administrator and sent to the Internal Revenue Service (IRS). Additionally, funds can only be transferred once per year.

A better way to transfer money is to have it sent via direct transfer from one investment company to another. This method carries no withholding, no amount limits, and is a much-more hands-off procedure for a casual investor who is looking for a better return.

Contact Your Attorney

To avoid making costly mistakes with your retirement income, it is always a good idea to consult with an attorney who specializes in estate planning issues, like Patricia Tichenor or Camellia Safi at the Law Office of Patricia E. Tichenor, P.L.L.C. Contact us today.

–excerpted from MarketWatch, “Tax Mistakes That Can Wreck Your Retirement,” Andrea Coombes, Feb. 21, 2012.

Divorce 101 in Virginia

Divorce 101 in Virginia

Divorce 101 in Virginia
NOVA Estate Lawyers – Leesburg, Virginia

Nobody likes divorce, but sometimes getting a divorce becomes a necessity, and apart from the emotional impact divorce imposes on families, there are a number of legal issues that need to be addressed. This is why it is always a good idea to speak with an attorney, like the Law Office of Patricia E. Tichenor, P.L.L.C, from the start of the separation and divorce process. Here are some of the basic topics to consider, or what we call Divorce 101:

Grounds
To get a divorce in Virginia, grounds, or the reason the court should grant a divorce, need to be established. There are five grounds in Virginia that include: adultery or sodomy outside marriage; conviction of a felony; desertion and cruelty; one-year separation (with minor children); or six-month separation (no minor children) with a signed Separation and Property Settlement Agreement.

Legal Separation
In Virginia, “separation” occurs when at least one spouse forms the intention to permanently separate from the other spouse and ceases to act as a married couple with his/her spouse to the spouse and the rest of the world around them. When this occurs, they are considered separated even if they have not yet signed a formal separation agreement. This typically can include living in separate bedrooms and possibly separate parts of the marital home and living as merely a roommate. It can but does not require that one spouse physically move out of the marital home. Upon separation, spouses should not engage in activities that could be construed to be them acting as a married couple, such as taking vacations together, expecting on spouse to cook or clean, etc.

Separation Agreement
A separation agreement is a contract between the parties that spells out each person’s rights and responsibilities during the separation through the divorce, and should include issues surrounding child support, custody and visitation; spousal support; and division of debts and marital property. The separation agreement aids in determining the terms of your separation and divorce, otherwise, a judge may decide them. It is in the best interest of all parties to outline an amicable separation agreement as soon as possible.

Child Custody and Visitation
To determine child custody and visitation, the courts look at the best interests of the child or children, taking into account a number of factors including: safety; maintaining meaningful and positive relationships with parents; minimal disruption to the child’s life; relationships with parents, siblings and family members; and a child’s preference if they are old enough to express an opinion. Parents are encouraged to work out a custody and visitation schedule and submit it to the judge.

A variety of visitation options can be considered, including “bird-nest” co-parenting. This allows the child(ren) to remain in the family home while the parents rotate in and out like birds alighting on the nest. When not living in the home, the alternate parent must reside in a separate residence. This approach works best with co-parenting agreements and with both parents living in close proximity to the family home.

Property Division
Since Virginia is not a community property state, each spouse does not automatically receive one half of the other spouse’s property. Instead, property is classified as “marital” or “separate.” Separate property refers to property acquired prior to the marriage, inherited or gifted, or proceeds from the sale of separate property. Marital property refers to property titled in both spouse’s names, and non-separate property acquired during the marriage. Property divisions can be outlined in the separation agreement, otherwise, the courts may divide property.

Spousal Support
The courts will generally not award spousal support to the party who has committed adultery so long as that adultery is proven by clear and convincing evidence to have taken place within less than 5 years from the date of separation and the non-adulterous spouse has not engaged in a sexual relationship with the unfaithful spouse after learning of the adultery. If denying spousal support could result in severe harm (sometimes called “manifest injustice”) to the spouse seeking it, even an adulterous spouse will be entitled to spousal support.

Contact Your Attorney
This post outlines the very basic elements of Divorce 101, but since each divorce is unique, it is always wise to contact an attorney. Each party should engage an attorney separately; we do not and cannot represent both sides in a divorce issue.

At the Law Office of Patricia E. Tichenor, P.L.L.C, attorneys Patricia Tichenor and Camellia Safi specialize in family law issues, including separation and divorce, please contact us today.

The Social Security and Medicare 2016 Outlook

The Social Security and Medicare 2016 Outlook

The Social Security and Medicare 2016 Outlook
NOVA Estate Lawyers – Leesburg, Virginia

How are Social Security and Medicare’s financial outlook for 2016? According to the Trustees for Social Security and Medicare trust funds, they pulled a financial burden of 41% of federal program expenditures in 2015. Due to economic and demographic factors, there are fewer workers paying into these funds than previously, resulting in decreasing income from payroll taxes. This is also worsening as more and more baby boomers reach retirement age and since they are living longer, are experiencing higher health care costs.

Social Security

The combined trust fund reserves (OASDI) for Social Security will continue to increase through 2019, then annual program costs are projected to exceed total income. This will cause the U.S. Treasury to begin drawing from its reserves to help pay benefits. Without Congressional action, these reserves will be depleted in 2034. Once depleted, payroll tax revenue alone will pay approximately 79% of scheduled benefits in 2034, falling to 74% by 2090.

The Social Security Administration is projecting that beneficiaries will receive a small cost-of-living adjustment of 0.2% for 2017.

Medicare
Since 2008, Medicare annual costs have exceeded tax income annually, although slight surpluses are predicted from 2016 to 2020. The HI Trust Fund has a projected depletion date of 2028, two years earlier than predicted in 2015, and once it is depleted, tax and premium income would still cover 87% of estimated program costs. It would decline to 79% by 2040 but gradually increase to 86% by 2090.

Due to the small cost-of-living adjustment, approximately 70% of Medicare beneficiaries may see only a small increase in the Part B 2017 premiums. A “hold-harmless” provision in the law limits the increase in Medicare Part B premium to the dollar increase in a person’s Social Security benefit. However, the remaining 30% may be subject to a much greater premium increase. This includes new enrollees, wealthier beneficiaries and those who choose not to have their premiums deducted from their Social Security benefit. They could see a rise in base premiums. Part B premiums could also increase for those subject to income-related premiums.

The reports urge Congress to address these challenges now, so the solutions may be implemented gradually. Proposals include:
• Raising the current Social Security payroll tax rate by 2.58 percentage points.
• Raising the ceiling on wages currently subject to Social Security payroll taxes
• Raising the retirement age beyond the currently scheduled age of 67 for anyone born in 1960 or later.
• Reducing future benefits, especially for the wealthier beneficiaries.
• Changing the benefit formula
• Recalculating the annual cost-of-living adjustment for benefits

A full report of the 2016 Social Security and Medicare Trustees reports can be found at www.ssa.gov and www.cms.gov.

Contact Your Attorney
At the Law Office of Patricia E. Tichenor, P.L.L.C., attorneys Patricia Tichenor and Camellia Safi specialize in estate planning. If you have questions about your benefits or any other issues surrounding estate planning, please contact us today.

Estate Planning and the Single Parent

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

Estate Planning and the Single Parent
NOVA Estate Lawyers – Leesburg, Virginia

You may be a single parent by many means: a spouse may have died, you divorced, you adopted a child, or had a child on your own. In any case, you are the primary caretaker of your child or children and need to consider estate plans in the event of your death.

Poor planning can cost your children a substantial portion of your children’s inheritance, and it is frustrating to see that happen when simple safeguards can easily be put into place. No matter how small or how large your estate is, it makes sense to protect it.

An experienced attorney, such as those at Law Office of Patricia E. Tichenor, 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.

Create a Will or Trust
If you die without a will, this often results in your estate having to be subject to probate, along with the expenses associated with it and the paperwork , which can tie up your assets for an indeterminate amount of time and cost a substantial amount of money.

Sometimes parents set up a trust for their minor child or children. Through it, assets will be handled and controlled by a trustee of the trust and have primary responsibility for the management and distribution of assets. These funds will be used to provide the ongoing financial support for your minor child.

Trusts 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.

Designate a Standby Guardian
Unfortunately, many people put off making a will because they don’t know who to designate as guardian for their child or children. You should designate a person or who is to have physical custody of your minor child, who is referred to as the guardian of the person.

This may or may not be the same person who is designated as the guardian of the estate, or manager of the financial resources. Sometimes it is wise to have different people managing money and children, as they have differing 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.

Also to consider, if you have sole custody and pass away without guardianship security, the surviving parent 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.

As you can see, there are many issues that need to be discussed as you put your estate plan into place. That’s why you need the advice of an experience attorney.

Contact Your Attorney
At the Law Office of Patricia E. Tichenor, P.L.L.C., attorneys Patricia Tichenor and Camellia Safi specialize in family law and estate planning to assist people with family law issues. Contact us today to set up your will, trust or guardianship plans.

Child Custody and Relocation

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

Child Custody and Relocation
NOVA Estate Lawyers – Leesburg, Virginia

When two parents divorce, the issue isn’t just between the two; it involves the children. Mistakenly, many couples think that once the custody issues have been settled it will be smooth sailing from then on. That is not normally the case because many other issues can crop up as life’s circumstances change.

One of the more complicated issues we encounter at the Law Office of Patricia E. Tichenor is when one parent wants or needs to relocate out of state because of a job offer or marriage to someone who lives in another state, or a parent who will work outside the state where the existing custody order is issued.

A parent who wants to relocate must establish that the relocation independently benefits the child. There is no “unity of interests” approach in Virginia; just because a move benefits a parent does not mean it will automatically be deemed to benefit the child.

No court can prohibit a parent from moving. If he or she wants to move, it is a matter of their constitutional rights to associate with and live wherever and with whomever he or she likes. However, courts do retain the right to control whether the child moves along with that parent.

Factors a Court Considers in Relocation Impact
There is no simple black or white solution. To consider whether the relocation is in the child’s best interests, the courts look at these factors:

If the relocation will substantially interfere with the non-moving parent’s ability to maintain a strong bond with the child as it exists at present, the judge may not agree that it is in the best interest of the child to be relocated with the moving parent. Courts also consider the reason the relocating parent wants to move with factors that include being closer to extended family, employment opportunities and economic advantages.

Courts can also take into consideration the existing relationship between the remaining parent and the child. If there is little or no contact, judges are more likely to side with the relocating parent and the non-relocating parent will have less success in blocking a child’s relocation.

It should be noted also that under Virginia law, the burden of proving that the relocation will be in the best interest of the child lies with the relocating parent.

If it is deemed that the move is in the best interest of the child, modifications to the existing custody arrangement need to be put into place. These can include weekends, summer vacations, or other variations that allow longer visitation times in exchange for the reduction in frequency as not enabled by the farther distance.

Contact Your Attorney
At the Law Office of Patricia E. Tichenor, P.L.L.C., attorneys Patricia Tichenor and Camellia Safi specialize in family law and estate planning to assist people with family law issues. If you are seeking to relocate with your child or attempting to block a parental relocation,  contact us today.

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