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Tag Archives: Law Office of Patricia E. Tichenor

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.

The True Costs of Probate: How to Save Your Loved Ones Money

Probate costs and fees

How to Save on Probate Costs and Fees
NOVA Estate Lawyers – Leesburg, VA

You might think you can save on estate planning costs by skipping the lawyer and writing your own will, or forgoing a will altogether. While a good estate planning attorney does cost money, their fees pale in comparison to what your loved ones will have to pay if your assets get tied up in probate court.

Probate is the process through which a deceased person’s estate is divided and distributed among his or her named beneficiaries if there is a will or to the heirs, as defined by statute, if there is no will. If a person dies intestate (without a will), a probate court will approve an administrator to manage the distribution of the deceased person’s estate as well as the payment to the administrator for providing these management services under the court’s supervision.  Assets where no will exists or where a will is improperly drafted may pass to persons you might never have intended to benefit from your estate.  In addition, if there are not sufficient assets passing through the will, your beneficiaries therein may not (due to improper planning) receive all that you might have otherwise desired.

Even if you write a will and designate your beneficiaries, a probate court still needs to review and accept the document before your beneficiaries receive their inheritance – and you can be certain that the court will take a percentage of it before passing it on.

What are some common probate fees an estate has to pay?

Like any court proceeding, the probate process will incur certain fees that are taken out of your estate, thereby reducing the total value of assets received by your beneficiaries or heirs. Here are a few common probate costs your loved ones may have to deal with upon your death:

  • Court fees. The probate court takes its fees out of your estate’s total value, as dictated by state law.
  • Appraisal fees. To determine the value of your property (both real and personal) and any business interests you owned at the time of your death, your estate will need to pay an appraiser.
  • Executor/Administrator fees. The executor of your will, whether appointed by you or the court, is entitled to a “reasonable fee” paid by your estate for carrying out their responsibilities. However, it is common for executors to waive this fee if they are already receiving a substantial inheritance from your estate.
  • Attorney’s fees. Like your executor or administrator, the attorney representing your estate in the probate process is entitled to receive payment for their services consistent with their hourly rate.
  • Accountant fees. Depending on the value and complexity of your estate, your executor/administrator may need to hire someone to file the proper tax forms, if not prepared by the attorney.

Your estate will also likely be subject to the probate tax.  In Virginia, this tax is imposed on the probate of wills and grants of administration for estates worth more than $15,000.  The tax applies to most estate property in Virginia, except: jointly held property with rights of survivorship; payable-on-death bonds; insurance proceeds paid to a named beneficiary; and property passed through a trust (see below).

How to reduce probate costs

The easiest way to lessen the financial burden of probate is to create a living trust. This estate planning tool allows you to place certain property and financial assets in the care of a designated trustee. While you may be your own trustee during your lifetime, your successor – an appointed family member, friend, or corporate bank entity, for instance – will inherit the assets in your trust upon your death, and manage them on behalf of your beneficiaries (trust beneficiaries are often minor children or grandchildren). If it is a revocable living trust, the terms can be changed at any point during your life.

Because ownership of property held in a trust does not go through the probate process, your family will not have to pay the court fees to receive their inheritance. It’s also faster and more direct than passing property solely through a will, since the court will not challenge or interfere with your decisions. As an added bonus, a trust can even help your family save on estate taxes.

Speak with an estate planning attorney

An experienced estate planning attorney knows the ins and outs of probate law, and will be able to tell you the most cost-effective ways to distribute your assets based on your circumstances. Your lawyer will ensure that your trust is properly created and legally valid, so that when the time comes, your family can receive their inheritance efficiently, and with the least costs incurred.

For more than 15 years, The Law Office of Patricia E. Tichenor, P.L.L.C. has assisted Northern Virginia families with their estate planning needs. Contact us today to learn how we can help you create the best plan for your family’s future, and potentially reduce probate court costs for your loved ones.

Legal Separation in Virginia: What Does It Mean?

Legal Separation in Virginia

Legal Separation in Virginia
NOVA Estate Lawyers – Leesburg, VA

The decision to end a marriage is emotionally painful and often very difficult for both spouses. But unlike an unmarried couple, you can’t simply move out and move on: You’ll need to go through the divorce process to officially dissolve your relationship in the eyes of the state.

For many couples, the first step on the road to divorce is separation, especially in no-fault cases. In some states, couples can file paperwork to officially claim the status of “legal separation,” in which they live apart and fulfill certain marital obligations prior to a divorce, as agreed to by a court order.

This is not the case in Virginia. Here, a married couple is considered “legally” separated if one or both members intend to end the marriage, and cease to cohabitate as a married couple.

What does that mean?

The first of the two main criteria for separation is simple: You and/or your spouse must believe the marriage is over and decide that you will seek a divorce. This decision may be made separately or mutually, and your husband or wife does not have to share your intention. However, a divorce court will not recognize the official start of your separation until you clearly communicate your desire to end the marriage to your spouse (more on that below).

The “cohabitation” requirement can be a little trickier if you still live in a shared residence – which many couples do at the time one or both of them decide the marriage is over. The easiest way to stop cohabitating as a married couple is for one spouse to move out, but that’s not always practical or financially possible, particularly if you have children together.

Fortunately, you can still be legally separated from your husband or wife while you’re under the same roof, but you must live and treat each other as platonic roommates. This means, first and foremost, that you cannot share a bed or room, nor can you act like a couple inside or outside the home. For example, you can’t shop, cook, or clean for each other, sleep together, go on one-on-one outings together, etc. Essentially, you must not behave in ways that would indicate you are a married couple.

How long do I have to be separated before I can get divorced?

Before a spouse can even file for a no-fault divorce, the Commonwealth of Virginia requires that they be officially separated for one year, or for six months if they have no minor children and create a separation agreement.

In fault-based cases on the grounds of cruelty, desertion, or abandonment, you can file for a limited divorce from “bed and board” at any point after your separation period begins. However, the court will only transfer a limited divorce to an absolute divorce from the bond of matrimony (i.e., you become legally single) after the couple has been separated for a full year.

Establishing the date of separation becomes important here: If the timeline is contested by either spouse, it may delay your divorce proceedings. A surefire way to prove the timeline of your separation is to both sign an agreement that clearly states the date you separated, and that you have no intention of reconciling. If one spouse moves out of the marital home and communicates the intent to end the marriage, this can also be considered a valid date of separation.

Your separation timeline is also important for dividing up assets during your divorce. Generally, any income earned and items purchased after the official separation date are considered separate, individual property that cannot be awarded to your spouse.

There are two key exceptions to the separation waiting period. If you can prove that your spouse committed adultery (or other sexual acts outside of your marriage), or if your spouse has been convicted of a felony and sentenced to at least one year of jail time, you may immediately file for a divorce from the bond of matrimony.

Keep in mind that, due to the complex nature of many divorce cases, it can take months or upwards of a year to get through the litigation process and receive a final order of divorce, regardless of grounds.

Consulting a family law attorney about your separation

If you and your spouse are considering divorce, you’ll want to speak with an experienced family law attorney to go over your options. A lawyer can also help you draft your separation agreement and reach the fairest, most equitable divorce settlement possible.

The Law Office of Patricia E. Tichenor, P.L.L.C., has been serving Northern Virginia families for more than 15 years, and we can make this complicated, difficult period in your life easier. Contact us today to speak with a counselor about your needs and circumstances.

4 Common Estate Planning Mistakes You Can’t Afford to Make

Estate Planning

Estate Planning Mistakes to Avoid
NOVA Estate Lawyers – Leesburg, VA

Estate planning can be a difficult and stressful process, and mistakes and oversights are common. After all, there’s a lot to consider when writing a will and naming beneficiaries, and it’s easy to miss a thing or two.

Unfortunately, the cost of these errors often falls on your loved ones when certain aspects of your will are not properly carried out.

Below are four frequent estate planning mistakes that could jeopardize the execution of your final wishes.

1. Only writing a will

A will is the most commonly discussed estate planning document, but it’s not the only one you need. You should also have a power of attorney – a legal agreement to give another person the authority to make important financial and medical decisions for you if you have lost the capacity to do so yourself while you’re alive. You can have separate POA agreements for financial versus medical decisions, but whoever you choose for the role(s) should be someone you trust to act in the best interest of you and your family. Without these documents, a court-appointed agent or a doctor could be the one making decisions about your assets and medical care.

2. Assigning responsibilities to the wrong individuals

Naming someone as an estate executor, a trustee, or a guardian to your minor children may seem like a great honor, but it also comes with a tremendous amount of responsibility. Think about whether the people you choose for these roles can handle the duties involved, as well as whether they might let family conflicts or greed get in the way of carrying out your intentions. Sometimes, it’s better to name an objective non-family member or hire a professional trustee who does not stand to benefit from your assets.

3. Never updating your will or beneficiaries

Estate planning is not a one-and-done activity. As you go through life, your circumstances and relationships will change, and you need to continually update your estate planning documents to reflect your current situation, especially if someone you’ve named as a beneficiary passes away or is otherwise no longer in your life.

Many experts recommend reviewing your will every three to five years, but at minimum, you should update it whenever you experience a major life event – marriage, divorce, the birth of a child, the death of a relative, etc. It’s also important to keep track of assets that are transferred outside the probate process – such as retirement accounts, life insurance, and joint property – and ensure your beneficiary designations are up-to-date.

4. Not making estate plans at all

A 2017 BMO Wealth Management survey found that a staggering 52 percent of Americans have not made a formal will. Verbally telling family members about your intentions or writing a letter for your children to open upon your passing does not constitute a legally valid last will and testament.

It can be scary to face your own mortality and procrastinate on estate planning, but it’s even scarier to think about the legal, financial, and emotional aggravation your children and surviving relatives will have to deal with if you don’t have a plan in place.

How to Avoid Estate Planning Mistakes

The best way to secure your family’s future is to work with a professional to create and update your estate planning documents. An experienced estate planning attorney will help you cover all your bases, and include the right legal language to ensure your wishes are honored. Even if you write your own will, you should still hire a lawyer to review and revise it.

Contact The Law Office of Patricia E. Tichenor, P.L.L.C. to speak with one of our counselors about your estate plans today.

Will Your Estate Plan Be Impacted by the New Tax Law?

Estate Planning Under the New Tax Law

Estate Planning Under the New Tax Law
NOVA Estate Lawyers – Leesburg, VA

When the Tax Cuts and Jobs Act (TCJA) was signed into law in December 2017, it brought numerous, significant changes for individuals and businesses alike.

With Tax Day 2018 behind us, many taxpayers have already felt the impact of this sweeping tax reform. Overall, the changes promise to benefit the average American – some of the provisions of the new law include:

– A lower top tax rate
– Increased standard deductions
– New or increased credits for qualifying children and dependents
– A deduction equal to 20 percent of “qualified” pass-through business income; and, beginning in 2019
– The repeal of the “individual mandate” for minimum essential health coverage and its associated penalty

One important change to the tax code under the TCJA is an increase to the estate and gift tax exemption. Previously, estates and lifetime gifts valued at $5 million (or $5.49 million, indexed for inflation) and higher were subject to federal estate taxes. The new limit, effective January 1, 2018 through December 31, 2025, is $11.2 million ($10 million base) for individuals and $22.4 million ($20 million base) for married couples. Put simply, the vast majority of American estates are now exempt from federal estate taxes.

It’s important to note that if you live in one of the 15 states with an estate or inheritance tax (or both), your estate may still be subject to state taxation if its exemption limits are not tied to the federal limits. Detailed information can be found on the Tax Foundation website.

Why Now is the Right Time to Review Your Estate Plans

Although your current assets may be nowhere near the new federal exemption limit, now is a good time to review your current will, trust, powers of attorney, or other estate planning documents. These new limits are only in place through the 2025 tax year, and will return to the previous $5 million limit afterward. The limit increase could even be reversed sooner, depending on congressional and presidential elections between now and then.

During this temporary increased exemption period, you can clarify your estate plan and ensure that your loved ones are set to reap the maximum benefits – with the least amount of taxes – when you pass away.

Of course, taking advantage of these exemptions requires estate planning documents with the proper legal language and specificity to make sure your wishes are honored. For example, married couples must invoke portability in their estate plan for the surviving spouse to avoid the estate tax on spousal inheritance that was within the exemption limits.

It’s also critical to customize your powers of attorney with specific instructions regarding the distribution and gifting of your financial assets. If your POA is too vague or general, your estate executor and/or financial agent now may not be able to distribute your estate plan to ensure the greatest tax savings to your estate or may have access to  a loophole to legally distribute your money as they see fit – and  not  in ways you intended.

Contact an Experienced Estate Planning Lawyer

Any time there is a change in tax law, life circumstances, or both, you’ll want to consult an experienced estate planning attorney who can help you navigate the complex and often emotional facets of planning for your family’s future. Contact The Law Office of Patricia E. Tichenor, P.L.L.C. to speak with one of our counselors about your estate planning needs today.

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

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