Month: October 2017

Your Divorce is Final. Have You Revised Your Estate Plan?

Your divorce is final, assets have been divided, child support, custody, and spousal support have been determined, and you’re ready to move forward with your life.  But you’re not quite done yet.  The final step in your divorce is an appointment with your estate planning attorney. The estate plan you created with your ex-spouse during your marriage needs to be revised and updated with new estate planning documents.  If you do not update and revise your estate plan, your ex-spouse or even your ex-spouse’s new husband or wife and children may inherit your assets.

If you have a will

During your marriage, you cannot disinherit your spouse through a will. After divorce, the best way to revise a will is to simply execute a new will, and revoke your old will.  This can easily be done by shredding or burning it, or by stating in the new will that you are revoking all prior wills. Making a new will ensures that your current wishes are reflected.  This includes the persons or entities you wish to receive your estate, the person you wish to be the executor of your estate, and most importantly, the person you choose to be the guardian of your minor children and their property. If you die and your ex-spouse is still alive, in all likelihood your ex-spouse will be awarded custody of your minor children. If both parents are deceased, or the surviving parent is determined to be unfit, the court will appoint a guardian. Though the court is not required to follow your guardianship choice, it most often will do so.  If you have sole custody of your children, and don’t want your ex-spouse to have custody if you die, you need to put your reasons in writing and attach that statement to your will for a judge to consider.

If you have a revocable living trust

As with a will, it is best to create a new revocable living trust after your divorce.  Minor children can be beneficiaries of the new trust, and your ex-spouse can be prevented from controlling their assets if you wish.  You can designate the new trust to be the beneficiary of various assets, such as pay-on-death bank accounts, transfer-on-death brokerage accounts, and life insurance policies. Even IRAs, 401(k)s, 403(b)s, and pensions can designate the trust as beneficiary, but there may be tax ramifications that you should discuss with your accountant and estate planning attorney.  If the divorce decree allows one party to remain in the family home, a trust may be used to shelter the property from creditors or a future spouse.  Depending upon your circumstances and goals, it may be necessary to set up more than one trust.

Beneficiary designations

Your spouse is probably designated as the beneficiary on your various bank and other financial accounts, life insurance policies, retirement and pension plans and social security benefits.  You will need to change the designation of such beneficiaries, or else those assets will pass automatically to your former spouse by operation of law and outside of your estate plan. As discussed above, if you are setting up a new living trust, you may want to name the trust as the beneficiary, especially if you have minor children. Otherwise, a beneficiary who is a minor will need a trustee or conservator to manage their inheritance, and the court may appoint your ex-spouse.  To make a beneficiary change you will need to obtain the necessary forms from your financial institutions, brokerage firm, or employer.

Powers of attorney

A financial power of attorney can give your agent broad powers, such as to sell your property and remove funds from your financial accounts. If you have appointed your spouse as your agent on any financial power of attorney, you should immediately execute a document revoking it and deliver a copy to all of your financial institutions. This may be done even while your divorce case is still pending. If you determine it is necessary, you can execute a new power of attorney appointing another trusted person as your agent.

Health care directives

If you have a health care advance medical directive or living will, you probably appointed your spouse to make medical treatment decisions for you when you are unable.  It is best if you revoke the document and execute new health care directives appointing a trusted person as your agent.  Again, this can be done while your divorce case is still pending. Your health care providers should be notified of the change and given a copy of the new document for your file.

Other considerations

Sometimes divorced couples remain friends and continue to trust each other on various matters. Nothing prevents you from leaving a gift to your ex-spouse in your will, or designating him or her as your beneficiary, your agent in a power of attorney, or custodian of minor children. The important thing to remember is that you should discuss your estate plan with an experienced Virginia estate planning attorney who will help you re-evaluate your plan, prepare and execute new documents, and make sure that your estate plan is complete and nothing has fallen through the cracks. This should be done as soon as possible to protect yourself as well as minor children.

About Melone Law, P.C.

Melone Law, P.C. is a general practice law firm based in Reston and serves the Northern Virginia area.  Our practice areas include Family LawDivorce and Special Needs ChildrenTraffic Ticket DefenseDUI/DWI Defense, and Trust and Estate Law.  Our philosophy is to provide all of our clients with the highest quality legal representation, innovative legal solutions, and unsurpassed dedication to customer service.  Through our high standards, we strive to be a trusted resource to our clients. We know from experience that a successful attorney-client relationship depends on our ability to understand your needs and objectives.  For more information about divorce and our estate planning services, contact our office today at 703.995.9900 or visit our website: www.MeloneLawPC.com.

Pet Trusts…What Happens to Fido When I’m Gone?

Your dog, cat, bird, horse, rabbit, guinea pig… are all important members of your family.  As part of the estate planning process, pet owners need to consider who will care for their pet(s) when they no longer are able to provide care themselves due to death or incapacity.  Should I leave my pet to a family member or friend? Can I support my pet financially after my death?  There are often many questions that an estate planning attorney can answer to give you peace of mind, and legal measures that you can take to ensure that your pet(s) will be taken care of in the future. When a pet owner dies without providing specific instructions for the care of his or her pet, the pet is treated as personal property, just like furniture, jewelry, and other possessions that legally pass to the beneficiaries under the pet owners will or trust, or to the heirs of the estate if the pet owner dies intestate.  When a pet owner becomes incapacitated, their pet is often left with whomever has taken over the management of the property and finances of the pet owner.  To remedy this situation and make sure that your pet is taken care of according to your wishes, you can establish a pet trust.  Virginia code 64.2-726 Trust for Care of Animal, outlines the planning of a pet trust in Virginia estate plans.

What is the purpose of a pet trust?

A Virginia pet trust is a legal document that can direct the physical and financial care for an animal or pet after the death or incapacitation of the owner. This includes any pet that is living at the time of your trust’s creation and named as a beneficiary of the trust.  It does not include any future pets that might be acquired.  The pet trust is active from the time of your death or incapacity until the death of your pet, or death of the last pet included in the trust.  A pet trust only covers pets that are explicitly named in the trust document.  If you have multiple pets, even multiple species, they can all be covered under the same trust.

In your pet trust you will determine:

  • Who will be the trustee, or the person in charge of the trust
  • Who will be the caretaker of your pet(s)
  • The beneficiaries (pet, or pets)
  • Reasonable expenses on behalf of the beneficiaries
  • Conditions of the trust
  • Responsibilities of the trustee
The Trustee:  When establishing a pet trust, you will need to determine a “trustee” or caretaker. The trustee will manage the trust and care for your pet. This is usually someone close to you who knows and likes your pet and is willing to take on the responsibility of pet ownership.  If you do not designate a trustee, the court will appoint an administrator who will oversee the management of the trust.  The trust property can only be accessed and used as the trust specifies.  The position of the trustee is to protect the trust beneficiaries, the named pet(s), and ensure the trust is well-managed.  If no family or friends are able or willing to act as caretaker, the pet owner may seek the advice of the pet’s veterinarian with regard to an appropriate organization to provide pet care. In some cases, the pet owner may consider designating a non-caretaker as trustee of the trust.  A trustee, who is not the caretaker, could be given the authority to enforce the trust in the event the caretaker is not acting in accordance with the provisions of the pet trust. Virginia law operates under the assumption that your named trustee is someone you will trust with the financial and physical responsibilities of caring for your pets.  Because of that, the trustee will not be subjected to the reporting, accounting, or appointments of court maintenance. Funding the pet trust:  The funding of a pet trust will depend upon the life expectancy of the pet, the standard of pet care desired, and the estimated cost of veterinary care, food, and other appropriate expenses.  You will need to review your estate and determine which assets will be included to fund the trust.  Assets may include property that is accumulating income like stocks and bonds, assets from the sale of your estate, or money that has been set aside for the purpose of funding your trust.  Any property not included or used by the pet trust will be redistributed within your estate. Standard of Pet Care:  A pet owner also may wish to include specific instructions within the trust detailing the standard of pet care to be provided.  This may include grooming, housing, feeding, veterinary services, and even things like exercise and socializing.  In addition, a pet owner may wish to clearly set forth the circumstances when surgery and other procedures, including euthanasia of the pet is appropriate, if ever, and provide guidance for the proper disposition of the remains after the death of the pet. Trustee compensation:  The pet trust may also be a source of income for the caretaker that you designate to take responsibility for your pet.  Assets within the trust may compensate the trustee and caretaker you appoint (if they are not the same person.) This compensation acts as incentive for the trustee and/or caretaker to continue caring for your pet(s) as you wished.

Termination of the Trust

When all of your pets that are covered by the pet trust die, the trust assumes the final expenses. The funeral, burial, cremation, or other end of life expenses are all paid by the trust.  The trust is terminated at the death of the last pet named under your Virginia pet trust. The remainder of any assets in the trust then reverts back to your original estate. Losing you can be completely life-altering for your pets and it’s important to have a plan in place. Knowing who will care for your pets when you can no longer take care of them will give you peace of mind.  Now is the time to consult an estate attorney about establishing a trust for your pets.

About Melone Law, P.C.

Melone Law, P.C. is a general practice law firm based in Reston and serves the Northern Virginia area.  Our practice areas include Family LawDivorce and Special Needs ChildrenTraffic Ticket DefenseDUI/DWI Defense, and Trust and Estate Law.  Our philosophy is to provide all of our clients with the highest quality legal representation, innovative legal solutions, and unsurpassed dedication to customer service.  Through our high standards, we strive to be a trusted resource to our clients. We know from experience that a successful attorney-client relationship depends on our ability to understand your needs and objectives.  For more information about pet trusts and our estate planning services, contact our office today at 703.995.9900 or visit our website: www.MeloneLawPC.com.

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