Month: April 2018

When is an Irrevocable Trust the Right Option?

As the name implies, an irrevocable trust is a trust that cannot be revoked, modified, amended, or terminated by its creator (the grantor) with very limited and specific exceptions.  Once the grantor has transferred an asset into the trust, it removes his/her right of ownership and that asset will no longer be considered the property of the grantor.  This is the opposite of a revocable trust which allows the grantor to modify or even terminate the trust at any time for any reason.  Also, unlike a revocable trust, it is not recommended that the grantor designate himself as the trustee. An irrevocable trust consists of three components:
  • Grantor – who creates the trust and “gifts” the assets
  • Trustee – who manages the trust assets
  • Beneficiary or beneficiaries – who inherit the assets in the trust
Usually the main reason for creating an irrevocable trust is for tax and estate considerations.  The assets held in the trust may include, but are not limited to, cash, homes, businesses, investment assets, and life insurance policies.  The funds will be managed by the trustee in accordance with the instructions set forth in the trust.

Benefits of an Irrevocable Trust

  • Property gifted to an irrevocable trust is no longer part of your estate and does not contribute to the estate’s gross value. The IRS cannot tax these items as part of your estate because you no longer own them.  This is beneficial if you have a very large estate that would be subject to the federal estate tax.
  • The transfer of assets into an irrevocable trust creates a permanent change of ownership. Property held in the trust will not be subject to probate upon the death of the grantor.  This allows the grantor and beneficiaries of the irrevocable trust to avoid both the time and expenses of probate.
  • An irrevocable trust protects your assets from creditors and lawsuits so that your assets are preserved for your beneficiaries. For parents of children with substantial debt, an irrevocable trust may provide protection for both you and your heirs.
  • Protects assets for special needs children and adults while allowing them to qualify for government benefits such as Medicaid and Supplemental Security Income (SSI).
An irrevocable trust may also be used to prevent assets from being misused by future beneficiaries and distributed with specific instructions and conditions.  It also allows the grantor to remove appreciable assets from the estate and gives the beneficiaries a step-up in basis in valuing these assets for tax purposes.

Contact an estate planning attorney

An irrevocable trust is a more complex legal arrangement than a revocable trust.  Because there could be current income tax and future estate tax implications in the use of an irrevocable trust, it is important to seek the guidance of an experienced estate planning attorney. A knowledgeable estate planning attorney will carefully review your finances, debts, and family situation to determine whether an irrevocable trust is the right estate plan for you.  Irrevocable trusts offer numerous advantages for some families, but can also present challenges.  It is vital that you carefully review all of the pros and cons of this type of trust with your estate planning attorney before proceeding with an irrevocable trust.

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 irrevocable trusts and estate planning, contact our office today at 703.995.9900 or visit our website: www.MeloneLawPC.com.

Child Custody and Visitation in Virginia

When spouses divorce, the issue of “who gets the kids” is often the most difficult and stressful for both parents and children. In the Commonwealth of Virginia, the law does not favor either parent.  Instead it considers the best interests of the child, and looks at the relationship between each parent and child.  While others may seek custody (grandparents, aunts, uncles) there is always a presumption in favor the natural parents. If the parents are not married, Virginia considers any offspring the child of his or her mother.  If the father wishes to assert rights to the child, paternity must be established or admitted in court.  There are several ways to establish paternity, and a father should consult a family law attorney for guidance.  Once paternity is established, neither party will be given a preference by the court solely on gender.

Types of Custody

Custody is separated into two parts, legal custody and physical custody.  A parent with legal custody has the right to make plans and decisions for the child’s education, medical care, religious upbringing, discipline, and other matters concerning the child’s welfare.  A parent with physical custody has the child living with them z majority of the time and can make decisions about the child’s everyday needs.
  • Temporary custody refers to who the child is living with on a temporary basis. It is only in effect pending a full hearing.
  • Joint Legal Custody: Joint Legal Custody is when both parents have an equal right to make important decisions involving the child, including their health, education, and welfare.
  • Sole Legal Custody: This type of custody is where only one parent has the right to make decisions affecting the child’s health, education and welfare.
  • Primary Physical Custody: refers to where the child resides a majority of the time.
  • Split Custody: Split custody arrangements are rare, and they involve one parent having custody of one child and the other parent having primary custody of another child. Some considerations for these types of arrangements are the age and maturity of the child and their expressed preference.
  • Shared Custody: Shared custody refers to an arrangement where the parties share time with the children more equally.

What does the court take into consideration when awarding custody?

  • Who is the current primary caregiver
  • Living arrangements for each parent
  • Which parent is better able financially to take care of the child
  • What is the psychological and physical fitness of each parent
  • What is the child’s preference
  • Age and health of each parent
  • Age, health, and gender of the child
  • Religious views
  • How close do the parents live to each other?
  • How close do they live to members of the child’s extended family?
  • Which parent lives closest to the child’s school and social circle?
  • Length of separation and where the child has been living
  • Any prior abandonment or surrender of custody issues

Visitation

Visitation defines the conditions for the non-custodial parent to have meaningful contact with the child. Visitation does not confer any type of legal authority or decision making, it only relates to the schedule of the child to see each parent. Visitation rights are not limited solely to the other parent.  Additionally, grandparents, step-parents, and other close relatives may be awarded visitation rights. While there are no reported cases in Virginia of brothers or sisters being given visitation, a strong argument could be made that it would be in the best interest of the child. The court has the power to deny visitation. Normally the court will only stop visitation for a specific time period or until a certain task is performed. For example, the court has previously denied visitation until the parent entered and completed a substance abuse program. The court may deny visitation if it’s proven that the non-custodial parent is dangerous or has put the child at risk.

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 custody and visitation, contact our office today at 703.995.9900 or visit our website: www.MeloneLawPC.com.

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