How to Identify and Prevent Estate Planning Fraud

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How to Identify Estate Planning Fraud | NOVAEstateLawyers.com

When you make estate plans during your lifetime, your goal is to make the probate process as stress-free as possible for your surviving loved ones when you die. Usually, a valid will and other estate planning documents mitigate a lot of potential questions and controversy in probate court. However, estate planning fraud and probate fraud do happen, and they can leave your family devastated.

Estate planning fraud can be easy to spot and prevent if you know what to look for and take the steps to be more secure. Below we outline the different types of fraud and how you can avert it to save your family from a harrowing process.

What makes an estate planning document fraudulent? 

Your will is a legal document that states your plan for the distribution of any assets where you have not already named a beneficiary to receive them (e.g., you might name a spouse or adult child as a payable or transfer on death beneficiary on your retirement account or life insurance).  Assets where there is no named beneficiary or assets like your personal belongings which can’t be designated prior to your death to someone pass through your Will and under the supervision of a probate court. These decisions are yours and yours alone to make, and even if you ask others for their opinion, what is represented in the will should be a reflection of your true wishes.

Of course, it’s easy to see why a relative might be unhappy with a loved one’s estate planning decisions, especially if they feel they deserve a larger share of the estate. This is what often leads to fraud attempts, both during the estate planning process and during the probate process after someone has died.

A fraudulently-executed will is considered invalid during the probate process. These circumstances can lead to a lengthy litigation in order to determine the validity of the will.

There are a few things that can classify a will as fraudulent: 

  • Forged signatures – One way for a will to be fraudulently executed is if it was signed by anyone other than the person who writes the will, known as the testator. The testator can be assisted with making “their mark” or “signature” on the Will by someone else but only at the testator’s direction and in the presence of two witnesses and a notary. In Virginia and other states, wills are required to be signed in the presence of two witnesses. Ideally, a notary should also be present. If the will’s validity comes into question, the witnesses can be questioned and testify about its execution and determine any fraud.  If a testator cannot physical sign without assistance, it may also be prudent to consider making a video record of the signing to establish capacity and overcome later challenges to the Will’s validity. 
  • Undue influence – Undue influence is when the testator is persuaded by another person to change their will and their actions are no longer of their own of their free will. Often this happens within the elderly population and amongst the wealthy. Signs that a testator may be a victim of undue influence are sudden cut offs in communication to the family and spending quality time with a new person who is then added as a beneficiary to their will. 
  • Lack of capacity – When signing a will, the testator must be of sound mind. They need to have the mental capacity in order to sign and understand the purpose and implications of the document. If a person is not of sound mind when they sign the will, it can be considered invalid. The level of capacity to sign a will is relatively low, however, and it can be difficult to prove that there was a lack of capacity to the court.

After you’ve passed: Examples of probate fraud

While you may be able to prevent estate planning fraud during your lifetime, someone may still try to commit probate fraud after you’ve died. This is when someone tries to submit an improper, invalid, or forged estate planning document to the probate court for their own benefit.

Below are some examples:

  • Will contest: A party may try to challenge an entire will’s validity.
  • Executor fraud: The estate executor makes false claims about the content of the document or has overcharged the estate. A probate attorney can obtain the right to seek evidence to prove the crime.
  • Former will submission: Someone attempts to enter a previous version of a will to receive property that is not designated for them in the most up-to-date version.
  • False codicil: A codicil is a document that makes a change to an executed will. A false codicil may be brought forward to give someone a substantial inheritance that is not rightfully theirs, according the valid version of a will.

Can I prevent estate planning fraud? 

The best way to prevent probate and estate planning fraud – or at least reduce the likelihood of it occurring – is to have transparent, honest conversations about your wishes. While planning and writing your will, be sure to openly share your plans with your named executor, your family members, and anyone else who may be included in your will.

You should also update your loved ones every time a significant change is made. That way, everyone can be on the same page regarding your plans, and they’ll be better able to detect if someone is trying to commit fraud during the estate planning or probate process.  With the ability to create a digital image of your estate planning documents, it is easier than ever to share an updated Will or other estate planning document by means of a thumb drive or a secured link using an email.

Contact an experienced estate planning attorney for help.

The Law Office of Patricia E. Tichenor has helped Virginia residents for nearly two decades to understand how to avoid fraud issues and contests in addition to preparing wills, living trusts, powers of attorney, and other critical estate planning documents. Contact us if you need assistance with your estate planning needs.  We can meet you for a home consultation if needed, and all our initial phone consultations are free of charge.

Does Your Teenage Social Media Influencer Need an Estate Plan?

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Estate Planning for Teen Influencers | NOVAEstateLawyers.com

With the rise of social media influencers like the Kardashian sisters and popular YouTubers, some pre-teens and teenagers are acquiring fame — and money — at an early age. Take it from 8-year-old Ryan Kaji, who earned $22 million in revenue in 2018 from his YouTube toy reviews.

If your child has begun accumulating their own wealth before age 18, you might want to consider creating an estate plan together. While no one wants to consider the possibility of death, especially so young, there are many important conversations to have regarding their assets.

Here are some tips for how to approach estate planning for your teenage social media influencer.

Estate planning for influencers: What to consider

Create a list of your child’s digital assets and their approximate value.

Influencers become successful through social platforms, such as YouTube or Instagram. It’s important to determine what might happen to these accounts, as well as the content that lives on them, if the influencer is no longer around to manage them.

Additionally, you’ll want to understand how much your teen is worth in relation to industry standards. First, make a list of all their digital assets. This includes all of their social accounts, images and videos, textual content and other intellectual property.

From there, you can calculate their value by considering their follower count, engagement rates, demographics and more. Then, speak with your teen about who they want to handle their digital assets if they were to pass away.

Consider a will and medical directives in case of incapacity

In 2017, Alec Sutton, an 18-year-old who suffered a head trauma in a car accident, was taken off life support in a local hospital, despite his loved ones’ pleading for more time and second opinions. While this was a tragic incident to say the least, the hospital’s decision was entirely legal. Because Sutton, a legal adult, lacked a medical power of attorney and a living will, his parents and relatives did not possess an absolute right to make decisions regarding life support.

When your child turns 18, you’ll want to prepare the right documents for such a situation, as failing to do so can be detrimental. One crucial form is a Durable Medical Power of Attorney. This includes HIPAA release form, which enables an adult child’s healthcare providers to disclose medical records with selected individuals (including parents), as well as living will provisions.

Without a Durable Medical Power of Attorney, parents of an adult child who becomes incapacitated might not be able to obtain a copy of their child’s medical record to get a second opinion or make other important decisions based on having that information.

Some decisions involved in these advance directives include emergency treatments, such as:

  • CPR
  • Ventilator use
  • Artificial nutrition (tube feeding)
  • Artificial hydration (IV, or intravenous, fluids)
  • Other life-prolonging treatments
  • Comfort care

Take time to discuss these decisions with your teen, as physical or mental incapacity can happen to anyone at any time. When your teen decides to appoint a proxy to make these medical decisions for them, ensure they sit down with that individual and has an open conversation about their preferences.

Decide who is responsible for financial assets if your child is under 18

Another consideration is your teen’s financial assets. The top-earning influencers often bring in thousands (or tens of thousands) of dollars per post, which adds up to a lot over the course of a year. Even if your teen hasn’t reached this level of income, it’s important that they dictate what will happen to their earnings in the case of incapacity or death.

Similar to choosing a medical proxy, your child should designate someone to assume responsibility of any financial decisions via a financial power of attorney. Make sure you sit down with your child and discuss this arrangement in great detail. You’ll want to respect their wishes while offering your support and insight from a parental standpoint.

Depending on your child’s earnings and income streams, you may also need to consult with a business planning attorney to set up a corporate entity can hold their assets until they turn 18 and can actively participate as a CEO or CFO.

Since many influencers are still young and financially inexperienced, they might not understand or even want to consider the implications of estate planning. Remind your child that you aren’t trying to control their lives, but that this simply a part of growing up and transitioning into adulthood.

Contact an experienced estate planning attorney for help

Whether it’s for yourself or your child, estate planning is not something you want to do alone. That’s why we recommend working with an experienced estate planning attorney.

If you’re looking for professional guidance with your Virginia estate planning needs, contact the Law Office of Patricia E. Tichenor.

Planning for Incapacity: What Documents Do I Need?

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Planning for Incapacity | NOVAEstateLawyers.com

Creating a valid will or trust plan gives comfort and clarity to your loved ones when you pass away. Equally important, though, is having an incapacity plan.

In the event that you become unable to make decisions for yourself due to an accident or health complications, an incapacity plan lets you appoint a capable adult to make medical and/or financial decisions on your behalf. While you hope that you or your loved ones will never have to experience this, it could happen to anyone at any time.

Having an incapacity plan in place can save you and your family money, time, and needless anguish during a difficult time. Here is what you need to know about planning for your potential physical or mental incapacity in the future.

What is an incapacity plan?

Be it from a traumatic accident, serious illness, or worsening mental condition, one can become incapacitated quickly and suddenly. Planning ahead allows your wishes to be protected by giving someone having the legal authority to represent you, your well-being, and your interests.

An incapacity plan covers three aspects of your life: financial, personal, and health. With these arrangements pre-made, it allows your family, doctors, and legal team to carry on smoothly and protect you.

Documents in an incapacity plan

An incapacity plan isn’t a singular document; rather it’s a series of advance directives to be followed if you are physically and/or mentally incapacitated. Below are some or all of the legal documents you may include in your incapacity plan:

Living will

A living will (sometimes known also as an advanced medical directive or health care proxy) outlines your wishes should you become diagnosed with a terminal illness or condition where end of life planning is required to be made on your behalf if you are incapacitated. This document is entirely separate from a Last Will and Testament and has absolutely nothing to do with your property or who inherits from you when you die.  At the Law Office of Patricia E. Tichenor, P.L.L.C., we include living will provisions in our durable medical power of attorney.

Do-not-resuscitate order (DNR)

A DNR states under what conditions you refuse to accept medical treatments after you stop breathing or your heart stops. It can also be a part of the living will provisions set forth in a durable medical power of attorney.

Durable Medical or Health care power of attorney

This is a document that gives someone the legal right to make health care choices for you should you not be able to communicate your wishes. Combined with a living will, a health care power of attorney ensures your medical choices set forth in that document and conferred upon your attorney-in-fact (also commonly referred to as “your agent”) under your power of attorney are honored.

Durable General power of attorney for finances

You can legally grant someone permission to manage your financial affairs through a durable  general power of attorney for finances. This allows a designated and trusted person selected by you to manage all aspects of your financial affairs during a period of incapacity, from paying bills, paying taxes, managing investments or bank accounts, and much more.

Revocable living trust

A revocable living trust allows you to transfer title during your lifetime of your assets to a legal entity considered separate from you so that your assets can be managed for your benefit as well as your family during your lifetime and after your death.  It can be a very effective tool to avoid probate, obtain creditor protections for assets held by the trust, and stagger inheritance distributions to your children (or grandchildren) until they reach ages at which you feel they may be readily able to handle what you leave them.  While typically you are the trustee of your living trust, you can choose a successor to take over the trust responsibilities should you become incapacitated.

What happens if I don’t have an incapacity plan? 

Failing to have an incapacity plan or any estate plan in place may cause great financial and emotional stress for your family. Without an appointed attorney-in-fact or agent, a court will have to decide based on whomever files a petition if they qualify to serve as a guardian of your person and a conservator of your assets.  The person filing to serve and the person appointed to serve in these roles may not be a person you would want to be handling these decisions for you.  Thus, it is critical to ensure you have a plan in place that meets your specific wishes and needs.

Second, if you have minor child(ren), you should seriously consider designating a “living guardian” for their protection, called a designation of standby guardian in Virginia.  Without one, you will have little to no control over where they end up if you are unable to care for them. If you become incapacitated without appointing a legal guardian for your minor child(ren), the court may decide who will house and care for them. This may be especially concerning if you are unmarried/divorced or if your child(ren)’s other parent is otherwise no longer in the picture.

Contact an experienced estate planning attorney for help with your incapacity plan

If you become unable to care for yourself or communicate your wishes, an incapacity plan can help your loved ones make difficult decisions about your health care and financial assets.  The Law Office of Patricia E. Tichenor can help you create a proper plan that protects your interests. Contact us today to discuss your estate planning needs.

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

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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.

Virginia Inheritance Laws: What Is Your Family Entitled to After You Die?

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Virginia Intestate Succession | NOVAEstateLawyers.com

If you die away without a will, this is known as “dying intestate.” The terms “intestate” and “testate” come from the longer name given to wills, which is a “Last Will and Testament.” So, if you pass away with a will, this is known as “dying testate.”

Dying without a will has serious consequences and means that the people who inherit your estate will be controlled entirely by Virginia’s intestacy statute, not you. It also opens the door for costly and drawn-out fights between your family members over your assets and over who might serve the role of administrator of your estate. Worse yet, the individuals who inherit from you may not even be those you ever intended to receive your assets.

That’s why it’s crucial to create a comprehensive estate plan, including a will, and update you will consistently throughout your life as your circumstances and wishes change. That way, you’ll have more control over what happens to your money and property after you’re gone.

If you don’t currently have a will, here’s what may happen if you die without having prepared one.

What is the probate process if you die without a will?

For decedents in Virginia without a will, the Commonwealth’s laws of intestate succession apply to any and all property or assets owned by that person. These laws dictate a specific “pecking order” of relatives and/or entities in line to receive all or some of the decedent’s estate.

Keep in mind that your estate will still be subject to the probate process even if you have a valid will at the time of your death. However, this process is generally much smoother, as the court can simply refer to your will and empower your named executor to settle debts and distribute assets to your beneficiaries.

Virginia’s inheritance laws also include a probate tax, which is currently a $1 state tax and $0.33 local tax for every $1,000 within the estate. Regardless of whether there’s a will, unless you follow the advice of an experienced attorney on how to avoid probate, your assets passing through the probate process cannot be distributed to any beneficiaries or heirs until your debts are paid, including taxes, court fees, credit card debt, and more.

Virginia intestate succession laws

Here’s a brief overview of Virginia’s current distribution scheme for persons dying without a will:

If you’re married

Spouses of deceased individuals have many inheritance rights — especially if there are no children involved. Even if you have children together, your spouse will inherit your entire estate, so long as all children were born of your current marriage.

However, if you have children born or adopted by you from a prior relationship, your spouse will only receive one-third of your estate, with the remaining two-thirds evenly divided among your children.

If you have children, but no spouse

If you do not have a surviving spouse but have children, those children will inherit your entire estate, regardless of whether they’re biological or adopted.

Inheritance rights do not exist for your stepchildren or foster children, regardless of how long they may have been under your care. To ensure they receive some of your assets, you’ll want to include them in your will.

If you’re unmarried and have no children

If you have neither a spouse nor children at the time of your death, your estate will be distributed accordingly:

  • Surviving parent(s): entire state to parent(s)
  • If no parents: estate split evenly between siblings
  • If no siblings: estate split evenly between nieces and nephews
  • If no nieces or nephews: estate split evenly between grandparents
  • If no grandparents: estate split evenly between aunts and uncles
  • If no aunts and uncles: estate split evenly between cousins
  • If no cousins: estate split evenly between great-grandparents
  • If no great-grandparents: estate split evenly between great-aunts and great-uncles
  • If no great-aunts and great-uncles: entire estate to ex-spouse’s family (if they died while married to you)

In cases where a decedent has no surviving heirs, ownership of their estate is transferred to the Commonwealth of Virginia (known as “escheatment”).  Your estate might also pass to the creditors of your estate, such as your mortgage company, if you owe money to a large creditor and they file with the court to serve as the administrator of your estate if no other person files and becomes qualified to do so on your behalf.

By creating a valid will, you can control and avoid the above outcomes and ensure your assets are controlled by and pass to the persons you would want to have them.

Draft a will to protect your assets and your family’s future

While all estates are subject to the probate process, taking the time to write and update your estate plan, including a will, makes it much easier for your family and loved ones, and much more likely that your exact wishes will be honored.

Need some guidance? Contact the Law Office of Patricia E. Tichenor to schedule a free consultation to discuss your estate planning goals and needs, from drafting your will or trust to preparing a financial or medical power of attorney setting up a trust.

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