Tag Archives: Estate Planning

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

probate court judge signing paperwork

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.

Estate Planning Questions You Never Thought to Ask

estate planning attorney and client

Important Estate Planning Questions to Ask | NOVAEstateLaywers.com

To say estate planning can cause stress is an understatement. When you sit down to plan for the unthinkable, you’ll find it can be emotional and downright confusing as you navigate the plethora of “what ifs.”

Many people postpone their estate planning for as long as possible as they may feel they are being faced with their own mortality. Some are afraid they won’t have all the bases covered when they do eventually pass away. Others are simply overwhelmed by the legal process of formalizing their wishes. However, asking the right questions will bring you peace of mind, knowing that your assets and family are taken care of.

Here are six estate planning questions you may have never thought to ask – but should.

What happens if my child’s appointed legal guardian passes away?

If your appointed guardian passes away before you, be sure to change the appointed guardian in your will to another person best fit for your child. It may also be important to discuss who they would appoint in their own will were they to pass away or become incapacitated with the child in their care. Keep in mind the court will appoint a guardian for your child if you do not do so; therefore, this is an especially important part of your estate planning if you have minor children.

Can a probate court overrule my will?

Probate is the process of authenticating your will, including distributing your assets and taking care of any debts owed. A probate court will also address any challenges to your will. For example, per Virginia law, disinheriting your spouse in your will won’t take away their rights to your estate, unless you have a signed premarital (prenuptial) agreement in place that is found legally binding and precludes them from inheriting from you unless you choose to make them a beneficiary.

The requirements in your last will and testament will vary from state to state, so if you own property or assets outside the Commonwealth of Virginia, be sure to discuss this with your attorney to find out how it may impact your estate plan and a future probate process at your death.  Using a trust plan rather than a traditional Will might be best for your estate plan to avoid costly probate taking place in more than one state as well as avoiding probate altogether.

What will happen to my digital accounts?

From social media (ex. Facebook, Twitter, LinkedIn) to your financial accounts managed on-line, it’s important to think about the future of your online accounts once you pass away. You may wish to carefully document and store all passwords in a safe place, and consider whether your executor should receive access to those passwords and accounts as part of their duties in settling your affairs.  A power of attorney is an ideal document to have in place if you become incapacitated, and it needs to be properly written in order to authorize your agent (also known as an attorney-in-fact) to manage your social media and financial accounts.

How long would I want to be kept on life support?

This is a question that may make you sweat in your seat, yet it’s a necessary one to ponder when estate planning. Documenting your preferences is helpful to your loved ones so they don’t have to make such difficult decisions on their own. Were a tragedy to happen, your preferences will be conveyed to health providers, giving your family peace of mind that your wishes are being met.

A medical power of attorney with end-of-life provisions (sometimes called “a living will”) clearly spelled out and naming a trusted friend or family member as your agent to make these decisions, in case you are no longer able to do so for yourself, is a key addition to any comprehensive estate plan.

Who will take ownership of my pets?

Many pet owners consider their animals as part of the family. However, this may not be the first question you’d think about when estate planning. You may wish to consider who would be able to give your pet a loving home if you pass away before them and want to be sure they are not placed in a “kill” shelter.

Today, states like Virginia have adopted statutes that allow you to create a Pet Trust for your pets’ care and protection, into which you can place funds as well as detailed care instructions for the person you name as the Trustee of that trust.  An experience estate planning attorney can also discuss additional documents or options available to protect your pets, not only at the time of your death but, also, during a period of incapacity.

Who would I want to be my power of attorney?

Power of attorney gives you the ability to name someone to make decisions for you if you were incapacitated or unable to speak for yourself. You also have the option to choose someone as a medical power of attorney solely for medical decisions, or a financial power of attorney for financial decisions. Whomever you choose, it should be someone you trust to make the best decisions for you, your family, and your assets.  Lastly, you may want a kind of “power of attorney” for the protection of your minor children if you (and the other parent) are both incapacitated (but not dead) and unable to care for them during a period of recovery, and, in Virginia, that document is called a Designation of Standby Guardian.  Think of this final document as a way to avoid a foster care event for your child and the process of a Department of Family Services investigation/home visit and approval process to approve a family or non-family member to serve as a foster or guardian of your child.

Have more estate planning questions? An experienced attorney can help.

Estate planning does not have to be as confusing or intimidating. The right attorney can make it empowering and use their experience to help you answer questions you might never have thought you’d have to ask. Attorney Patricia E. Tichenor and the Law Office of Patricia E. Tichenor have nearly two decades of experience helping Virginia residents with estate planning matters. Contact us to discuss your circumstances so we can help you tackle these difficult questions.

How to Choose an Executor for Your Will

man signing last will

How to Choose an Executor for Your Will | NOVAEstateLawyers.com

When you pass away, your executor is the one who will legally tie up any loose ends. They will typically handle of any or all of the following responsibilities:

  • File court documents for the probate process
  • Fulfill the distribution provisions contained in your will for any beneficiaries
  • Pay estate’s final bills, debts, and taxes
  • Notify the government, banks, and creditors of the death
  • Secure any assets for minors or an incapacitated beneficiary if immediate distribution to them cannot be made (commonly with trust provisions or custodial bank account provisions contained in the will)

Choosing an executor is an important decision, and it shouldn’t be taken lightly. This person should be someone with whom you have a strong relationship with and can trust to honor your wishes once you pass.

There are many questions you’ll have as you decide on an executor for your will, some of them obvious and some not. To give you some peace of mind as you make this choice, here are a few things you’ll want to consider.

Who can I trust?

Many believe the most important quality in an executor is financial and legal intelligence. However, no amount of intelligence matters if you’re not sure you can trust someone. Would you have confidence in this person to pay back a large amount of money you loaned them? Are they responsible and make good decisions in their own life? If you have a hard time answering yes, you may need to look elsewhere.

Be sure to appoint someone who is honest and can responsibly hire the right people to take care of your wishes. You need someone who you trust with your life to trust in death.

Do I have to pick family?

While the most obvious choice may be a close loved one, such as your spouse or oldest child, heavily consider if it is the right choice. No matter how strong your relationship, if you have difficulty relying on someone or they aren’t in good financial standing, they may not be the best person to support your needs after you’re gone – and it’s okay not to choose someone because of that.

Another factor in choosing family is age and health. If you don’t have someone in your family who you believe will outlive you or isn’t in good enough health to carry out these responsibilities, than you may want to consider looking outside of family.

What about a third party?

If you’re having a hard time choosing a family member or friend, another option is to appoint a bank, trust, or a professional estate executor to handle your affairs. These are business or legal professionals who will educate and engage you on the steps of executing your will and bring you into the process.

Keep in mind that hiring a professional will incur additional costs and fees: While a family member often takes on the executor role on a volunteer or reimbursement basis, a third party will expect compensation for their services. However, it may be worth the investment if you believe having a neutral party as your executor will keep the peace within your family after you’re gone.

How do I get someone’s approval to name them as my executor?

Whether you chose family or a third party, it’s strongly recommended that you ask their permission before you name them in your will.

If you’re choosing a family member or friend, sit down with them to review your current will and financial status so everything is clear. And as time goes on, continue to update them with any changes so they can stay up to date on your final wishes.

Have more questions about choosing an executor? Consult an experienced estate planning attorney.

Ensuring your affairs will be taken care of after you’re gone can be challenging. An estate planning attorney will review the process with you, discuss your options, and see if the person you have in mind as your executor is truly the best option for you.

The Law Office of Patricia E. Tichenor, P.L.L.C. has nearly two decades of experience helping Virginia residents with their estate planning needs. We’re here to listen and discuss your needs with you to take the next steps.

Contact us to discuss your circumstances so we can help you choose the right executor for your will.

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.

Gifting as an Estate Planning Tool: What You Need to Know

lifetime gifting for estate planning

Gifting as an Estate Planning Tool
NOVA Estate Lawyers – Leesburg, VA

For many people, passing on money and property to their loved ones happens after they die. However, if you have a sizable estate, you may not want to wait until then to give your heirs their full inheritance.

Under current federal law, individual estates valued above $10 million or $20 million per couple (indexed for inflation each year through tax year 2025 – so for 2018, the amounts are $11.2 million and $22.4 million, respectively) are subject to a 40 percent federal estate tax at the top rate. Strategic lifetime or inter vivos gifting can reduce the size of your taxable estate before your death, and help your beneficiaries avoid this hefty financial burden.

Qualified gifting is the complete and irrevocable transfer of assets from one person to another, where the giver does not receive anything in return. Certain IRS exemptions allow you to make these gifts completely tax-free, provided their values fall within the federally allowed limits. Going above these allowable amounts means that you, as the giver, are obligated to report the gift to the IRS and pay a federal gift tax.

If you plan to use gifting as an estate planning tool, you’ll want to plan out your giving and time it properly, so you and your loved ones can avoid as much estate-related taxation as possible. Here is a basic overview of annual and lifetime gifting exemptions, and how you can make the most of them.

Annual Gift Tax Exclusion

For tax year 2018, the annual gift tax exclusion allows you to give any single individual up to $15,000 per calendar year, tax-free. That means if you have three children and give each of them $15,000 this year (or $30,000, if you are married and you and your spouse “split” the gift), you do not need to pay gift tax. However, if you give one child $16,000 in a single year, $1,000 of that is considered taxable, and counts against your allowable lifetime gift amount (see below).

By the same token, your recipient does not have to report annual gifts under $15,000 as income, but they must report any income or interest earned directly from that gift.

Lifetime Gift Tax Exemption

The lifetime gift tax exemption is connected to the estate tax exemption: The $10 million limit is the combined amount that you can give away prior to death and leave to others after death, without being subject to federal taxes. This means that if you give away $5 million in non-exempt gifts while you’re alive, only $5 million of your remaining estate is tax-exempt, and your estate must pay taxes on anything beyond that amount.

If you are married at the time of your death, your surviving spouse is entitled to their own individual exemption plus any of your unused exemption, if you properly invoke portability in your estate plans.

You must also consider that the estate tax exemption is currently set to return to its previous $5 million individual limit in 2026. If you are young and unlikely to pass away before then, you’ll want to adjust your gifting plans accordingly.

Exceptions to the rules

There are a few gifting scenarios that do not count toward the above limits:

  • Marital gifts. If both spouses as U.S. citizens, they can make unlimited lifetime gifts to one another without paying taxes on those gifts.
  • Medical and educational gifts. Payments made directly toward a dependent-beneficiary’s medical services or education (e.g. tuition expenses) is not included in your lifetime gifting amount.
  • Charitable gifts. You do not have to pay gift tax on gifts given to qualifying organizations like charities, religious or educational institutions, government agencies, and 501(c)(3) tax-exempt organizations.

You can learn more about gifting, including specific information about the state laws in Virginia, in our blog post.

Talk to an estate planning attorney about gifting.

If you’re considering making gifts to reduce your taxable estate, it’s important to speak with an experienced attorney who can educate you on federal gift tax laws and other implications of lifetime giving. You can also work with your estate planning lawyer to create a strategic gifting plan that reduces your taxable estate while leaving you enough to support yourself.

The Law Office of Patricia E. Tichenor, P.L.L.C. has been assisting Northern Virginia individuals with their estate plans since 2001, and we’d love to help you create the best strategy for your family’s future. Contact us today to talk about your unique estate planning needs.

The Law Office of Patricia E. Tichenor, P.L.L.C.
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(703) 669-6700

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