Divorce in the Exceptional Needs Family

Families with individuals with exceptional needs will face additional challenges in navigating separation and divorce. Some challenges the courts are equipped to handle, and others are severely lacking.

In an ordinary custody and visitation case, the court will look to the “status quo” for the family. Most often, one parent has been the primary care provider, managing appointments for the child and tasks of daily living, while the other parent has been the primary breadwinner. Frequently, the court will award primary custody to the primary care provider and set a visitation schedule for the other parent. The visitation schedule will be intended to allow for frequent, regular, contact, and can include overnight as well as daytime  visits.

Traditional Visitation Schedules Can Create Problems

For many families, a traditional schedule of alternate weekends and a midweek evening or overnight visitation can work. For others, these abrupt changes create new problems. The transitions between households, changes in daily routine, and new living arrangements can be overwhelming for a child with exceptional needs. These children can experience setbacks in their level of function and increased anxiety, leading to new problems for parents already facing a difficult time. Without knowing the exact impact a  visitation arrangement will have on a child, it’s difficult for the court to accommodate these concerns when implementing a schedule.

A Collaborative Strategy

Before filing a contested divorce and asking the court to implement a visitation schedule, parents should attempt a collaborative approach. This can mean involving caretakers, treating providers, therapists, or other experts before making any changes. A collaborative strategy can implement small changes over time to ensure that setbacks can be addressed quickly and adjustments can be made. Getting parents on the same page to act for the benefit of the child should be the top priority for all involved.

What if the other parent won’t work with me?

If a collaborative approach won’t work, making sure you present your case appropriately to the court is essential. Involving opinions from experts and caretakers will help the court take all of the relevant factors into consideration before making a custody and visitation determination. In cases where parents cannot agree on custodial matters or treatment for the child, it may be necessary to request final decisionmaking authority where one parent has the final say in any disputes over care for the child.

Take Action Quickly

If your family is facing separation and divorce, you should take steps to act quickly, before the matter escalates. Addressing concerns at the beginning and working toward a collaborative care strategy means taking time to figure out what works for your family. Before initiating a separation, it’s essential to speak with an experienced attorney to determine what your options are.

Contact Melone Hatley Today

When a divorce case concerning a child with special needs is handled properly, you can achieve a good result for the entire family. Our attorneys help make the system work better for you by making sure the needs of your child are given priority.  If you are considering a divorce, contact our firm today for experienced advocacy. Schedule a free initial phone consultation to discuss your options today.

 

 

 

Estate Planning in Divorce

When going through a divorce, there is a lot going on and many people will forget how important it is to update their estate plan. Even a simple divorce can take over a year to finalize and a lot can happen in that year that can jeopardize your final wishes.

It was recently discovered that Larry King had a will that excluded his estranged wife. At the time of his death, Larry King was in the midst of a divorce with his seventh wife. As can be seen in this article, Mr. King drafted a “secret” will that excluded his estranged wife and left everything to his children. Further complicating this process is that two of the children named in his will had already predeceased him. While Mr. King’s estate plan is much more diverse and complicated than most people need, he is still running into some very common issues. Now, Mr. King’s estranged wife is challenging the will and it is likely that this matter will be wrapped up in expensive litigation that could have been easily avoided with an updated estate plan.

When going through divorce, the following will help to avoid these types of issues:

 

  • Find a law firm that specializes in both divorce and estate planning. While you can seek help from two separate law firms, it will be most efficient to have your estate plan handled by the same firm that is handling your divorce.
  • If possible, draft a new health care directive and power attorney prior to filing for divorce. If the divorce has already been filed, try to get this done as soon as you can. Without these documents, your spouse may have control over decisionmaking if something happens to you while your case is pending.
  • You must update your beneficiary designations on all of your accounts. Properly updating your beneficiary designations is part of the estate plan and should be looked at when anything happens in your life.
  • Create a dynamic estate plan. While most people think they only need a will, generally speaking a trust would better achieve the estate plan. A trust is not just for those with a lot of assets, it is for anyone who wants to ensure that their assets are truly protected or for anyone who has children who are still under the age of 18. A trust can be modified after the divorce is finalized or at any point that there is a major life change. Remember that if you pass away while your children are underage, the assets will flow to your ex-spouse, which may have been something that should have been avoided.
  • At the very least, draft an updated simple Will that will last for the duration of the divorce. By drafting the updated will for the divorce, you will ensure that your estate plans are met if something happens during the divorce. Then once the divorce is over, create a more dynamic estate plan.

If you have questions about your estate planning during your divorce or custody case, contact one of our attorneys today to schedule a phone consultation.

Estate Planning During Divorce

When going through a divorce there are many variables that must be addressed; do you stay in the home, do you sell assets, do you purchase assets, are you going to be able to negotiate an agreement or will this matter be hotly contested. One of the more overlooked aspects of the divorce process is preparing your estate for the unknown.

The following are common mistakes made during the divorce process and how to fix them:

 

  • Failing to update, or have in place, a power of attorney and advanced medical directive. If you do not have these documents in place, your spouse can make decisions until you are officially divorced, which may take over a year.
    • During this time, you want to create a power of attorney and assign that role to a trusted family member; a sibling or parent would be best. You will also want to create an advanced medical directive that lays out exactly what you want to happen in case you become ill and are not able to communicate your wishes. Even if you are temporarily unconscious, or under anesthesia, your agent can step in and make decisions on your behalf.
  • You do not have a will or have not updated your will. If you do not have a will, your spouse may get 100% of your estate if something happens to you during your divorce.
    • It is important to update your overall estate plan in order to direct your assets away from your soon to be ex-spouse. You can use beneficiary designations, revocable trust, and other estate planning tools to limit the potential exposure of your estate assets.
    • After the divorce is finalized, it is important to revisit your estate planning to ensure it fits in line with your goals. If you want to leave assets to a minor child, you’ll need to have a structure in place to ensure they receive the benefit you want without the risk of control by your ex-spouse.
  • Failing to update beneficiary designations on bank accounts or life insurance claims.
    • If you have not set your beneficiary designations and something happens to you; the assets will be subject to your estate and your spouse will potentially inherit 100%
    • Beneficiary designations are some of the most important elements of your estate plan, and can make a huge difference in the cost and time involved in probate. Make sure to review your options with a trusted financial advisor and estate planning attorney.

If you haven’t considered the impact of your divorce case on your estate plan, it’s essential to speak with a family and estate attorney who can advise you of your options. Make a plan today by consulting with our office in Reston 703-995-9900 or Virginia Beach 757-296-0580, or schedule a consultation online.

Wealth Transfer Strategies to Consider in an Election Year

With a push by the Democratic party to return federal estate taxes to their historic norms, taxpayers need to act now before Congress passes legislation that could adversely impact their estates. Currently, the federal estate and gift tax exemption is set at $11.58 million per taxpayer. Assets included in a decedent’s estate that exceed the decedent’s remaining exemption available at death are taxed at a federal rate of 40 percent (with some states adding an additional state estate tax). However, each asset included in the decedent’s estate receives an income tax basis adjustment so that the asset’s basis equals its fair market value on the date of the decedent’s death. Thus, beneficiaries realize capital gain upon the subsequent sale of an asset only to the extent of the asset’s appreciation since the decedent’s death.

 

If the election results in a political party change, it could mean not only lower estate and gift tax exemption amounts, but also the end of the longtime taxpayer benefit of stepped-up basis at death. To avoid the negative impact of these potential changes, there are a few wealth transfer strategies it would be prudent to consider before the year-end.

 

Intrafamily Notes and Sales

 

In response to the COVID-19 crisis, the Federal Reserve loweredthe federal interest rates to stimulate the economy. Accordingly, donorsshould consider loaning funds or selling one or more income-producing assets, such as an interest in a family business or a rental property, to a family memberin exchange for a promissory note that charges interest at the applicable federal rate. In this way, a donor can provide a financial resource to a family member on more flexible terms than a commercial loan. If the investment of the loaned funds or income resulting from the sold assets produces a return greater than the applicable interest rate, the donoreffectively transfers wealth to the family members without using the donor’sestate or gift tax exemption.

 

Swap Power for Basis Management

 

Assets such as property or accounts gifted or transferred to an irrevocable trust do not receive a step-up in income taxbasis at the donor’s death. Gifted assets instead retain the donor’s carryover basis, potentially resulting in significant capital gains realization upon the subsequent sale of any appreciated assets. Exercising the swap power allows the donor to exchange one or more low-basis assets in an existing irrevocable trust for one or more high-basis assets currently owned by and includible in the donor’s estate for estate tax purposes. In this way, low-basis assets are positioned to receive a basis adjustment upon the donor’s death, and the capital gains realized upon the sale of any high-basis assets, whether by the trustee of the irrevocable trust or any trust beneficiary who received an asset-in-kind, may be reduced or eliminated.

 

Example: Phoenix purchased real estate in 2005 for $1 million and gifted the property to his irrevocable trust in 2015 when the property had a fair market value of $5 million. Phoenix dies in 2020, and the property has a date-of-death value of $11 million. If the trust sells the property soon after Phoenix’s death for $13 million, the trust would be required to pay capital gains tax on $12 million, the difference between the sale price and the purchase price. Let us say that before Phoenix died, he utilized the swap power in his irrevocable trust and exchanged the real estate in the irrevocable trust for stocks and cash having a value equivalent to the fair market value of the real estate on the date of the swap. At Phoenix’s death, because the property is part of his gross estate, the property receives an adjusted basis of $11 million. If his estate or beneficiaries sell the property for $13 million, they will only pay capital gains tax on $2 million, the difference between the adjusted date-of-death basis and the sale price. Under this scenario, Phoenix’s estate and beneficiaries avoid paying capital gains tax on $10 million by taking advantage of the swap power.

 

Grantor Retained Annuity Trust

 

A grantor retainedannuity trust (GRAT) is an efficient way for a donor to transfer asset appreciation to beneficiaries without using, or using a minimal amount, ofthe donor’s gift tax exemption. After the donor transfers property to the GRAT and until the expirationof the initial term, the trustee of the GRAT (often the donor for the initial term) will pay the donor an annual annuity amount. The annuity amount iscalculated using the applicable federal rate as a specified percentage of the initial fair market value of the property transferred to the GRAT. A Walton or zeroed-out GRAT is intended to result in a remainder interest (the interest that is considered a gift) valued at zero or as close to zero as possible. The donor’s retained interest terminates after the initial term, and any appreciation on the assets in excess of the annuity amountspasses to the beneficiaries. In other words, if the transferred assets appreciate at a rate greater than the historic low applicable federal rate, the GRATwill have succeeded in transferring wealth!

 

Example: Kevin executes a GRAT with a three-year term when the applicable federal rate is 0.8 percent. He funds the trust with $1 million and receives annuity payments of $279,400 at the end of the first year, $335,280 at the end of the second year, and $402,336 at the end of the third year. Assume that during the three-year term, the GRAT invested the $1 million and realized a return on investment of 5 percent, or approximately $95,000. Over the term of the GRAT, Kevin received a total of $1,017,016 in principal and interest payments and also transferred approximately $95,000 to his beneficiaries with minimal or no impact on his gift tax exemption.

 

Installment Sale to an Irrevocable Trust

 

This strategy is similar to the intrafamily sale. However, the income-producing assets are sold to an existingirrevocable trust instead of directly to a family member. In addition to selling the assets, the donor also seeds the irrevocable trust with assets worth at least 10percentof the assets being soldto the trust. The seed money is used to demonstrate to the Internal Revenue Service (IRS) that the trust has assets of its own and that the installment sale is a bona fide sale. Without the seed money, the IRS could recharacterize the transaction as a transfer of the assets with a retained interest instead of a bona fide sale, which would result in the very negative outcome of the entire interest in the assets being includible in the donor’s taxable estate. This strategy not only allowsdonors to pass appreciation to their beneficiaries with limitedestate and gift tax implications, but also gives donors the opportunity to maximize their remaining gift and generation-skipping transfer tax exemptions if the assets sold to the trust warrant a valuation discount.

 

Example: Scooby owns 100 percentof a family business worth $100 million. He gifts $80,000 to his irrevocable trust as seed money. The trustee of the irrevocable trust purchases a $1 million dollar interest in the family business from Scooby for $800,000 in return for an installment note with interest calculated using the applicable federal rate. It can be argued that the trustee paid $800,000 for a $1 million interest because the interest is a minority interest in a family business and therefore only worth $800,000. A discount is justified because a minority interest does not give the owner much, if any, control over the family business, and a prudent investor would not pay full price for the minority interest. Under this scenario, Scooby has removed $200,000 from his taxable gross estate while only using $80,000 of his federal estate and gift tax exemption.

 

Spousal Lifetime Access Trust

 

With the threat of a lowered estate and gift tax exemption amount, a spousal lifetime access trust (SLAT) allows donorsto lock in the current, historic high exemption amounts to avoid adverse estate tax consequences at death. The donor transfers an amount up to the donor’s available gift tax exemption into the SLAT. Because the gift tax exemption is used, the value of the SLAT’s assets is excluded from the gross estates of both the donor and the donor’s spouse. An independent trustee administers the SLAT for the benefit of the donor’s beneficiaries. In addition to the donor’s spouse, the beneficiaries can be any person or entity including children, friends, and charities.The donor’s spouse may also execute a similar but not identical SLAT for the donor’s benefit. The SLAT allows the appreciation of the assets to escape federal estate taxation and,inmost cases, the assets in the SLAT are generally protected against credit claims.Because the SLAT provides protection against both federal estate taxation and creditor claims, it is a powerful wealth transfer vehicle that can be used to transfer wealth to multiple generations of beneficiaries.

 

Example: Karen and Chad are married, and they are concerned about a potential decrease in the estate and gift tax exemption amount in the upcoming years. Karen executes a SLAT and funds it with $11.58 million in assets. Karen’s SLAT names Chad and their three children as beneficiaries and designates their friend Gus as a trustee. Chad creates and funds a similar trust with $11.58 million that names Karen, their three children, and his nephew as beneficiaries and designates Friendly Bank as a corporate trustee (among other differences between the trust structures). Karen and Chad pass away in the same year when the estate and gift tax exemption is only $6.58 million per person. Even though they have gifted more than the $6.58 million exemption in place at their deaths, the IRS has taken the position that it will not punish taxpayers with a clawback provision that pulls transferred assets back into the taxpayer’s taxable estate. As a result, Karen and Chad have saved $2 million each in estate taxes assuming a 40 percent estate tax rate at the time of their deaths.

 

 

Irrevocable Life Insurance Trust

 

An existing insurance policy can be transferred into an irrevocable life insurance trust (ILIT), or the trustee of the ILIT can purchase an insurance policy in the name of the trust. The donorcan make gifts to the ILIT that qualify for the annual gift tax exclusion,and the trustee will use those gifts to pay the policy premiums. Since the insurance policy is held by the ILIT, the premium payments and the full death benefit are not included in the donor’staxable estate. Furthermore, the insurance proceeds at the donor’sdeath will be exempt from income taxes.

 

When Should I Talk to an Estate Planner?

 

If any of the strategies discussed above interest you, or you feel that potential changes in legislation will negatively impact your wealth, we strongly encourage you to schedule a meeting with us at your earliest convenience and definitely before the end of the year. We can review your estate plan and recommend changes and improvements to protect you from potential future changes in legislation.

About Melone Hatley

Melone Hatley is a general practice law firm with offices in Reston and Virginia Beach. Our practice areas include Family Law, Divorce and Special Needs Children, Traffic Ticket Defense, DUI/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 CPS investigations and our family law practice, contact our office today at 703.995.9900 in northern Virginia or 757-296-0580 in Virginia Beach or visit our website: www.MeloneLawPC.com. You can also schedule a time for a free consultation with one of our attorneys online at www.melonelawpc.com/contact.

Signing Your Will During COVID-19

For many families, COVID-19 has brought estate planning to the top of the priority list. Unfortunately, most law offices are closed or limiting their availability due to stay-at-home orders or other state restrictions. Estate planning attorneys are still able to complete meetings by phone and can send clients documents by email or mail for signature. One of the most frequently asked questions during this time is “can I sign my will during quarantine?”

Will Requirements in Virginia

In Virginia, a holographic will is valid and enforceable. A holographic will is completely in the testator’s handwriting and signed by the testator. A typewritten will must be signed or acknowledged by the testator in the presence of two witnesses. A will does not need to be notarized in Virginia, but frequently will include a self-proving affidavit to notarize the signatures of the testator and witnesses. Including a self-proving affidavit with a will makes it easier to establish the validity of the will.

Some jurisdictions require that witnesses be “disinterested” – that they not be family members or beneficiaries under the will. In Virginia, there is no requirement that witnesses of a will be disinterested. This means that family members who are over 18 may act as witnesses to your will.

Trust Requirements in Virginia

Typically, trust agreements are signed and notarized by the grantor, but they do not require a notary in order to be valid. Rather, trust agreements only require the signature of the grantor. A certification of trust must include the signature of the trustee. For those with revocable living trusts, the grantor may also be the trustee during their life.

If the trust or certification of trust is to be recorded with land records, it will need to be notarized.

Other Estate Document Requirements

A durable power of attorney will be presumed to be genuine if signed and notarized by the principal. If the power of attorney is to be filed with land records, it must either be notarized or proved by two witnesses.

Advance medical directives must be signed before two witnesses in Virginia. While it is not required that the witnesses be disinterested, our office generally recommends using disinterested witnesses where possible. This helps prevent any claim of undue influence later.

Signing Under Quarantine

The requirement for witnesses to be “in the presence” of the testator does not have a specific distance requirement. In order to be in someone’s presence, they could be across the room or across an outdoor area from one another. So long as the witness observes the signer executing the document and sees that the signer is not under any duress or impairment, they can act as a witness.

Since witnesses do not have to be “disinterested,” family members who are under quarantine in the same household are able to act as witnesses for one another.

A trust agreement should be signed in the presence of a notary in case it needs to be filed with land records in the future. In that case, use of a mobile notary who can remain at a safe distance or even in the car can be helpful to finalize trust documents.

A durable power of attorney only needs to be signed by the principal to be effective, however, it’s highly recommended that it be notarized. Similar to the trust agreement, use of a mobile notary may be useful to ensure the power of attorney is not challenged later.

About Melone Hatley

Melone Hatley is a family and estate firm serving Virginia Beach and Northern Virginia. 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 estate planning, contact our Reston office today at 703.995.9900 or Virginia Beach at 757.296.0580 or visit our website: www.MeloneLawPC.com.

 

COVID-19 and Your Estate Plan

As COVID-19 continues to spread throughout the United States, more Americans are facing new realities. Dealing with school closures, quarantines, and stay-at-home orders has impacted businesses and families in new ways. During times like this, more families are getting to their “to-do” lists that may have been lingering on their minds for some time. These times of uncertainty have also reminded many families of the importance of estate and financial planning.[/caption]

As the rate of infections increases, the chance of illness touching your family becomes a real possibility. Making sure everyone in your family is protected properly before anything happens is essential. This is the time to be sure your estate and financial plan are up to date and in line with your wishes, especially if you or anyone in your family is considered at “high-risk” for infection.

Essential Documents

At a minimum, everyone should have in place a basic will, advance directive, and durable power of attorney. In addition to your essential documents, you should make sure all insurance policies and other beneficiary designations are up to date. On any account where you can name a “pay-on-death” or “transfer-on-death” beneficiary, you should make sure those designations are in place and up to date. Those designations will pass automatically upon your death, outside of your will and outside of probate. This type of transfer is ideal as it avoids any potential claims from creditors against the estate and creates a smooth transfer for your loved ones.

Will

Your will can include specific gifts of personal property or other financial gifts, your funeral and burial wishes, and any guardianship preferences for minor children. The objective of any estate plan is to maximize the financial benefit for your beneficiaries while keeping the transition smooth and clear to all those involved. If your funeral and burial wishes are clear, there will be no question between your family and loved ones as to what you would have wanted.

Advance Medical Directive

Your advance medical directive allows you to choose an agent to make medical decisions on your behalf if you are temporarily or permanently incapacitated. In Virginia, your advance medical directive also includes your living will, which allows you to make decisions about life-sustaining treatments if you are ever in a terminal, unresponsive, condition. Although the decisions can be difficult to make now, it’s much easier on your family and loved ones if your wishes are clear and enforceable should the unthinkable ever happen.

Durable Power of Attorney

Your durable power of attorney allows you to choose an agent to make financial decisions and engage in financial transactions on your behalf if you are unable to manage your own affairs. You can choose to have this authority only go into effect if you are incapacitated, which is referred to as a “springing” power of attorney. Otherwise, your power of attorney gives authority to act immediately as well as during incapacity.

Creative Planning

In addition to the above documents, there are other ways to control distributions to your beneficiaries in a way that will maximize the financial benefits of your estate. For many families, one of their largest assets is their real estate, which ordinarily has to pass through probate after the owner’s death. Another option available in Virginia is the Transfer on Death Deed. This type of transfer does not create any interest in the property for the beneficiary during the owner’s life and may be revoked at any time. It allows the real estate to pass outside of the will and outside of probate to the chosen beneficiary, just like a life insurance policy or other financial account with a pay-on-death designation.

Another option for families with young children, or irresponsible adult children, is the revocable family trust. This option allows families to put assets into a vehicle, known as a trust, and control how distributions are made after their death. Beneficiaries may have certain expenses paid on their behalf and may receive distributions at certain ages or other intervals.

About Melone Hatley

Melone Hatley is a family and estate firm serving Virginia Beach and Northern Virginia. 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 estate planning, contact our Reston office today at 703.995.9900 or Virginia Beach at 757.296.0580 or visit our website: www.MeloneLawPC.com.

 

The Importance of Estate Planning for the Single Parent

Being a single parent has added responsibilities, including making sure that your minor children are taken care of in the event you no longer are there.  What would happen to your children if you died, or became incapacitated and could no longer care for them?  Where would they live?  Who would take care of them?  Who would pay for their day-to-day care, housing, and education?  If you are not married to the child’s other parent, or are married but separated and in the process of divorce, these questions become much more complicated.

You may legally be the sole decision maker when it comes to the care of your children and you may have a plan in mind.  You may have spoken to family members or friends about what you would want to happen if you were to die unexpectedly.  But, unless these plans are stated in properly executed estate planning documents, your choices may not be followed.  A knowledgeable and experienced Virginia estate planning attorney will educate and advise you, and create the documents needed to make sure your wishes become a reality.  Remember, your goal is to make sure your children are well cared for, even if you’re not the one doing it.

An estate plan is much more than a will!

A properly drafted estate plan will reduce your stress now, and also reduce the stress and eliminate guesses and conflict of those left behind during a difficult time.  What estate planning documents do you need and how will they help you as a single parent?

Will

First and most importantly, your will is used to name a guardian for your minor children.  In the event of your death, your children’s other parent will automatically become their guardian.  But, even if that parent is fit, you should always designate a guardian in case the other parent can’t or chooses not to act.  You may also designate a different person, other than your children’s other parent or the named guardian, to manage your children’s inheritance.  Without a will, the court will appoint a guardian of their choosing and may grant custody of your children to someone you wouldn’t want raising them.

A will is also used to designate the executor for your estate; the person who will honor your wishes and decisions and distribute the estate according to your instructions.  If you don’t have a will, your estate will be distributed per the intestacy laws of Virginia.

Revocable Living Trust

A living trust has many benefits, especially for a single parent of children who are too young to manage assets on their own. A trust allows you to be in charge of your assets while you are alive, but when you die or become incapacitated, the person you name as successor trustee will follow your wishes, administer your assets as necessary, and make distributions to beneficiaries. This is particularly important even if your children are technically adults…18 years or older.  Young adults may not be ready to handle an inheritance and use the money as you would want.  A well written trust will name a trustee who can distribute the inheritance wisely and per your intentions, with the goals of paying for living expenses, college, or possibly a down payment on a home.  A properly drafted trust will also avoid probate, which can be both expensive and time-consuming.

Advance Health Care Directive

A health care directive, often called an advance medical directive or “living will” allows you to name someone you trust to make decisions about your health care when you are not capable of doing so yourself.  This allows a single parent to specify, in advance, what his or her health care wishes are and how they should be carried out.  This should give you peace of mind, knowing that your medical decisions even made in advance are made according to your wishes.  It also makes sure that your family members do not undergo the additional strain of trying to make key medical decisions on your behalf, during an already stressful time.

Power of Attorney

As a single parent, you are probably the only name and signer on your bank accounts, mortgage, credit cards, and other bills.  A durable power of attorney lets you name a trusted individual to manage your financial affairs and legal decisions if you are not able to due to incapacitation.  It’s critical that someone is able to access your accounts, if necessary, to pay your bills and mortgage, keep the lights on, and make sure your children are being properly cared for.

Beneficiary Designations

You may have life insurance policies and retirement accounts.  These policies are not listed in your will or trust.  The beneficiary designations on these accounts will control who they are distributed to.  It is important to understand that minor children are not legally allowed to control assets, so it is important that you review your policies and make sure your minor children are not named as beneficiaries.  If they are, a guardian will have to be appointed by the court to manage these assets until the minor child turns 18.  A Virginia estate planning attorney can suggest strategies that will allow your children to benefit from your life insurance and retirement accounts without court intervention.

As a parent, your first and most important goal is to protect your children.  This is true even if you are not able to do so yourself because of incapacitation or death.  As one of your most important responsibilities, a comprehensive estate plan allows you to make decisions now to ensure that your children are cared for in the way you wish if the unthinkable happens.

About Melone Hatley

Melone Hatley is a general practice law firm and serves Virginia Beach and 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 estate planning, contact our office today at 703.995.9900 in Northern Virginia or 757.296.0580 in Virginia Beach, or visit our website: www.MeloneLawPC.com.

DIY Estate Planning…Beware of Unintended Results

It sounds easy and promises “legal” results.  It’s less expensive than working with an attorney.  But estate planning is a serious process and if done incorrectly may have unexpected and expensive results.  Let’s look at five reasons why you should give those online forms or that estate planning kit a pass and consult a Virginia attorney who specializes in estate planning.

One size fits all solution

Most DIY solutions don’t contain many options.  It’s a fill-in-the-blank exercise and doesn’t address your specific or unique estate planning needs.  Your life doesn’t necessarily fit neatly in a box, so why would you expect your estate to?  The needs of a single parent are much different from the needs of a large blended family, or even an older couple with grown children and grandchildren.  One size doesn’t fit all… it usually fits no one.

It’s only as good as the person filling in the information

An estate planning attorney has a legal education and continuing education courses, as well as years of experience working with different kinds of clients with many different needs and wishes.  An online question and answer form can’t answer a client’s questions or impart legal information or advice.  It is not individualized and treats your needs and wishes exactly the same as everyone else who uses the program.   Obviously, this is no substitute for the expertise of a knowledgeable attorney who will ask the right questions and create an estate plan for your unique situation.  Remember, the unintended mistakes made today, will likely impact your children and grandchildren in the future.

Creating a comprehensive estate plan

An estate plan is not just a will.  A properly created estate plan not only specifies what happens to your assets when you die, it also plans for what happens if you become incapacitated and can no longer take care of yourself or your finances.  It should include a power of attorney and an advance medical directive that appoints someone to act on your behalf if/when you can’t act for yourself.  It may also include a trust or trusts to pass assets while avoiding probate or to take care of a person with special needs.

An estate plan will also identify and address contingencies.  What should happen if a child predeceases you or you have a child after your will is drafted?  How should your assets be divided if you divorce or remarry?  A simple will may be a start, but it is not an estate plan.  A DIY solution may not cover these items and leave you with an incomplete plan that does not carry out your final wishes.

You don’t know what you don’t know!

Estate planning is rarely black and white.  There are many gray areas that are important. A DIY program may not take some of these into account.  If you’re “filling in the blanks,” or even skipping a question or part of the form you don’t feel is relevant, you may not know what you’re missing.  Even mistakes in legal language can be costly.  Estate law is governed by the state where the person resides when he/she dies, and individual state laws vary greatly on estate issues.  The Commonwealth of Virginia has very specific requirements on how to execute estate planning documents, including who must witness these documents and rules surrounding a self-proving affidavit.  A small oversight now could cause huge, and often expensive problems for your loved ones later.  Failure to follow statutory formalities for execution may invalidate the entire will.

Probate or non-probate assets

Some assets pass to your loved one through your will or trust, while other assets pass by law through specific beneficiary designations.  Items like savings bonds, certificates of deposits (CDs), life insurance, retirement accounts, and certain types of bank accounts can be designated to automatically pay at death.  A knowledgeable estate planning attorney will review all your assets and advise you on how to pass each most easily and inexpensively to the beneficiary.  Properly drafted estate planning documents take both types of assets into consideration to ensure that your estate plan follows your wishes.

Drafting your own estate planning documents through a do-it-yourself program,may be a risky endeavor.  Though certainly less expensive, a DIY solution takes the most important element out of the process: the knowledge and advice of an experienced estate planning attorney with specialized education and legal training.

About Melone Hatley.

Melone Hatley is a general practice law firm and serves Virginia Beach and 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 estate planning, contact our office today at 703.995.9900 in Northern Virginia or 757.296.0580 in Virginia Beach, or visit our website: www.MeloneLawPC.com.

Estate Planning Before Military Deployment

An estate plan has several objectives.  It should provide for your family’s financial security, ensure that your property is passed to your beneficiaries as you wish, and determine who will manage your assets and make sure that your estate is distributed properly after your death.  Military families need to consider some special estate planning issues that others, outside of the military, do not, especially if family members are deployed overseas.  Members of the military also have access to special benefits that may complicate their estate.  For this reason, it’s important to consult a knowledgeable estate planning attorney with expertise working with military families in Virginia.

Estate planning documents

Members of the military often move frequently, are deployed overseas to different countries, and have access to government benefits both during and after service.  They may also be subject to unexpected tax rules and issues.  Estate planning for military members and their families may be more complicated than for their civilian counterparts.  An experienced military estate planning attorney can help you with the following:

  • Wills and trusts
  • Guardianship for minor children or children with special needs
  • Financial powers of attorney
  • Advance medical directives (living wills)
  • Funeral and burial arrangements
  • Organ donation
  • Life insurance
  • Survivor benefits
  • Estate taxes
  • Family care plans
  • Beneficiary designations
  • Estate administration and/or probate

Some factors to consider

Everyone’s estate plan should be customized to that person’s specific circumstances.  Below are factors that should be considered by your estate planning attorney:

  • Are you married?
  • Do you have minor children?
  • Do you have children with special needs?
  • Do you own property? Where is it located? Is it in more than one state or country?
  • Do you have an IRA, 401k, or other retirement or pension accounts?
  • Do you have life insurance? What types?
  • What other military benefits do you have or have taken advantage of?

Though the military offers estate planning services to its members, they are often incomplete and do not necessarily include the legal requirements of the Commonwealth of Virginia.  As in most states, Virginia has some unique and specific requirements for estate planning that need to be taken into consideration.  Even if you have used the JAG Corp or your estate plan was created by an attorney in another state, it’s a good idea to have a Virginia estate planning attorney review the documents and make sure that all your needs and Virginia requirements are met.  At a minimum, your Virginia estate planning attorney should make sure the following are completed before you deploy:

  • Get your legal documents, detailed above, in order.
  • Sign up for life insurance.
  • Update all beneficiary designations.
  • Make survivor decisions on your military pension.
  • Find out about other benefits for survivors.

About Melone Hatley

Melone Hatley is a general practice law firm and serves Virginia Beach and 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 military estate planning, contact our office today at 703.995.9900 in Northern Virginia or 757.296.0580 in Virginia Beach, or visit our website: www.MeloneLawPC.com

Estate Planning…What Do Wills NOT Do

As discussed in previous blogs, it’s important to have a will and estate plan in place.  But though there are many advantages to creating a will, there are some things a will simply can’t do.  A will is the perfect document for parents with minor children to use to designate a guardian for their children, minimizing court intervention and honoring their wishes.  A will is also the right estate planning document to use to designate an executor for your estate. You can also, through a will, choose to provide for specific persons who would not otherwise be provided for under Virginia state intestacy laws, such as friends, godchildren or stepchildren.

There is no doubt that you need a will, however you also need to understand the limitations of a will.  For this reason, it is always advisable to meet and discuss your needs and wishes with a knowledgeable and experienced Virginia estate planning attorney who can help you determine which estate documents you need for your specific situation.

Here’s what a will cannot do:

  • A will cannot help you avoid federal estate taxes, although some kinds of trusts can reduce or postpone tax liability.
  • If you hold property with another person through joint tenancy, tenancy by the entirety or community property with right of survivorship, your will cannot change the beneficiaries of such properties.
  • A will cannot help you avoid probate, although any property you have transferred to a living trust will not go through the probate process.
  • If you have life insurance for which you have named a specific beneficiary, then you cannot designate a different beneficiary, or any beneficiary of that account, in your will.
  • Any money you have saved in a retirement account, IRA, 401(k) plan for which you’ve named a beneficiary does not go through your will.
  • Some stocks and bonds held with a transfer-upon-death designation will not go through your will.
  • If you have a payable-upon-death bank account, it will not go directly to beneficiaries and not through your will.
  • You cannot leave a gift in your will which is contingent on the marriage, divorce, or change of religion of a beneficiary.
  • You cannot leave money in your will for an illegal purpose.
  • You cannot provide long-term care for a loved one in your will. Trusts can provide long-term care for loved ones, in particular, special needs trusts can provide for loved ones suffering from incapacity or disability.
  • You can’t leave money to your pets in your will. However, you can leave your pet to a person who has agreed to provide a good home for said pet, and leave that person money to assist in paying for any expenses related to the pet. Through use of a trust you can establish ongoing care for any of your pets.

Leave a separate document regarding your funeral or memorial service

If you have spelled out your wishes for the disposition of your body, your funeral arrangements or memorial service arrangements in your will, be aware that wills are seldom read until days or sometimes weeks after the death. This is generally too late to be of any help to those who are left to plan your funeral or memorial service. It is a good idea to have a separate document created which clearly spells out your wishes for disposition of your body and other arrangements, making sure your loved ones have a copy or know the location of this document.

Don’t be one of the 55% of American adults without estate planning documents

Dying without a will almost guarantees that the manner in which your estate is distributed will not reflect your actual wishes. Having a will, on the other hand, allows you to exercise control of the many personal decisions Virginia default provisions cannot address. More than 55 percent of American adults don’t currently have a will or an estate plan of any kind.  Take the time to meet with an experienced Virginia estate attorney who can help you decide what type of estate plan will best suit your needs.

About Melone Hatley

Melone Hatley is a general practice law firm based in Reston and Virginia Beach. 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 wills and estate planning, contact our office today at 703.995.9900 or visit our website: www.MeloneLawPC.com.

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