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 Law, P.C.

Melone Law, P.C. 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 Law, P.C.

Melone Law, P.C. 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 Law, P.C.

Melone Law, P.C. 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 Law, P.C.

Melone Law, P.C. 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.

Estate Planning… Mistakes You Don’t Need to Make

Estate planning can be a complicated and tricky business.  Without a legal document detailing your wishes and how and when you want your estate divided and distributed, your assets could end up in the hands of a son or daughter before he/she has a clue about how to manage money wisely, or even a relative you hardly know.  One of the most important things you can do to protect both your estate and your loved ones is to consult with an experienced estate planning attorney.  They will ask the right questions, listen to your answers, and draft estate planning documents that make sure that your wishes are followed and mistakes are avoided.  The last thing you want is your heirs “duking” it out in court after you’re gone.

Here are four, often-made mistakes that are easily avoided:

Failing to maintain or update your estate planning documents:  Even with what you may consider a simple estate… maybe just your bank accounts or a house, it’s absolutely crucial that you have and maintain a valid will or living trust. Otherwise, you’ll have no control over who will inherit your possessions, your wishes may not be fulfilled, and it will be up to Virginia intestacy law to decide how to distribute your assets.  This could mean that your estate will be split between people who don’t get along and end up fighting over your estate in court, or people you don’t wish to inherit. Make sure that beneficiaries are kept up to date, especially after a life-changing event like a death or divorce.  The beneficiaries of life insurance policies, a 401k, and other retirement accounts will need to be changed.  If your first wife is still the beneficiary of your life insurance policy, no matter how long you’ve been divorced, or how long you’ve been married to your current spouse, she will inherit and get to keep the money. People mistakenly think that once their will or trust is signed, they’re done with it forever, but that’s not the case.  You should review your estate planning documents every five to six years to make sure nothing in your life that has any bearing on your estate has changed. Be careful when naming an executor:  Families are complicated and family dynamics during stressful times can cause in-fighting and damage relationships.  Feuding siblings are probably the most common cause of litigation over an estate.  It’s often best to name an objective, independent representative as executor of the estate, another family member or close friend, instead of one of your children.  Even if the estate is to be divided equally between siblings, giving the ultimate decision-making power to one of your children may be a recipe for disaster.  An independent representative, whose only allegiance is to your wishes, will settle the estate and potential disputes fairly. Gifting money to minor children or grandchildren with no rules in place:  If you name a minor a beneficiary of your estate with no restrictions, that young person will have total access to his/her inheritance at the age of eighteen.  Children, unfamiliar with access to large sums of money or budgeting can blow through an inheritance in a matter of months. The most prudent thing you can do to prevent a situation like this is to create a revocable living trust that provides for the health, education and well-being of the young heir. It’s a legal document you create that allows you to manage your estate while living, and designate a trusted agent to execute your wishes after your death. The trustee may be a family member, friend, or even someone unrelated to you, who will use the money responsibly to cover the child’s college tuition and costs, buy him/her a car, and generally help instill proper money management lessons.  Once the child reaches a specified age, maybe 25 or 30, he/she can inherit the balance of the estate. Ideally, this will ensure that your wishes for your heir is met and that he/she is set up for a financially secure life for the long-term. Don’t forget to specify the beneficiaries of important personal items:  The death of a loved one often doesn’t bring out the best in relatives, especially when it comes to heirlooms and other valuable or meaningful items owned by the deceased.  To keep family members from squabbling over, stealing, or hiding items that they want, talk with your children, grandchildren, and other family members now about which possessions mean the most to them.  Then put it in writing.  Clearly list exactly what you want to bestow on each heir and where it is kept, and attach this list to your estate planning documents.  Remember, it’s easy to challenge a “verbal” agreement in court, but much more difficult to disprove a written one. The best way to ensure that your wishes for taking care of your loved ones and distributing your property are carried out after your death is to consult with a knowledgeable and experienced estate planning attorney. In Virginia, Melone Law, P.C. is here to help. We offer a full range of estate planning and probate services including wills, trusts, powers of attorney, living wills and advance health care directives, estate tax planning, guardianship and conservatorship, and representation for contested estate matters.

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

How Often Should I Review My Will, Trust, and Estate Plan?

There are two primary reasons for having an estate plan:
  • To make sure that your family and loved ones are taken care of to the best extent possible following your death, and
  • To provide clear instructions on what should happen to your estate following your death
Without a will or trust, the Virginia courts will apply state intestacy law to distribute your assets, regardless of what you wanted or promised.  The courts not only decide what happens to your assets, they may also decide what happens to your children.  Your will or trust and other estate documents are the most important legal documents you’ll probably ever sign. The goal of good estate planning is to ensure that your assets go to the people that you want to benefit after you’re gone.  Because life isn’t static and is filled with many changes over the years, your estate planning documents may need to change and be updated too. Many people create a will relatively early in life to achieve these goals, because they understand that death can, unfortunately, come at any time. But as you move through adulthood, your life will probably change in ways that impact both the assets that you own as well as the people in your life that you want to benefit. You get married, have children, buy a house, have grandchildren, have a pension or open retirement accounts… the list goes on and on.  You may have created a basic will at some point, even a do-it-yourself will, without the help of an estate planning attorney.  But as your life changes and assets grow, an attorney with expertise in estate planning will help you understand strategic estate planning methods that better fit your situation and provide additional protections and benefits for beneficiaries than simply passing property through a will. Your will and other estate planning documents should be reviewed whenever you have a life changing event.  But even without big life changes, it’s best to review your documents with a Virginia estate planning attorney every three to five years. Laws are ever changing and you want to be sure that your documents remain effective and efficient at expressing your wishes.

What events should prompt my estate planning documents to be updated?

  • Marriage
  • Divorce
  • Birth or adoption of a child
  • Children reaching the age of majority (18)
  • Death of a spouse
  • Death or incapacity of a beneficiary
  • Buying or selling a primary residence or vacation home
  • Buying or selling a major asset (boat, plane, collectibles)
  • A significant change in your estate’s value
  • Change in your executor, guardians, trustees, agents, or personal representatives
  • Receipt of an inheritance
  • Medical needs
  • Changes to state law
  • A move to a new state
  • Starting a new business
  • Planning for charitable or other organizational contributions
In addition to the list above, everyone should have all their estate documents reviewed before the age of 70 if you have an IRA or 401(k) that requires you to begin taking distributions at the age of 70 ½.

How do I change my will or trust?

There are several different ways to amend or update your estate planning documents and much depends on how big a change you are making.  It is best to consult an estate planning attorney when making changes to executed documents to ensure that all legal formalities are followed and the changes being made are effective. Codicil:  A codicil is the formal way to amend your will.  It is a way to add a new provision to or revoke a part of your existing will.  Adding a codicil to your will can do a number of things, such as revoke the inheritance of a previous beneficiary or establish a new beneficiary for inheritance. However, you should not attempt to make substantial changes to your will through a codicil. Once the codicil is written, signed, witnessed, and dated, it should be kept with the original will. Memorandum of Tangible Personal Property:  One issue you’ll want to consider when you’re writing your last will and testament is how you want your personal effects distributed, including things like jewelry, collectibles, antiques, artwork, china, silver, furniture, etc. In other words, who gets the grand piano and which daughter or daughter-in-law gets your diamond engagement ring.  If you have specific people in mind to receive certain items, you can list them and the property you’d like them to receive in a separate written list and attach it to your will.​  Using a personal property memorandum allows you to change these bequests without worrying about all the formalities of having a codicil or amendment signed and witnessed. It’s usually far easier to simply detach an old memorandum and replace it with a new one when you want to make changes. Revocation:  If you need to make major changes to your will, it may be more beneficial to rewrite your will than to edit or amend the existing one.  To revoke your existing will, simply state that your new will revokes any previous wills.  Then sign and date your revocation in your newly established will. It’s best to destroy all known copies of the old will so that your beneficiaries won’t be confused. Updating a Trust:  As long as your trust is revocable, you are able to make changes at any time. An irrevocable trust cannot be changed under any circumstances.  A revocable trust can be amended, revoked, or terminated at any time and for any reason. To make a change, you simple attach a signed and dated amendment to your revocable trust. The amendment may make changes to trust property, beneficiaries, or designations.  Be sure you attach your amendments to your original trust documents in order to reflect your changes. No matter what changes you need to make, be they large or small, the important thing to remember is an outdated will or trust means that the court must abide by your outdated wishes, regardless of the changes in your life or your current wishes. The laws of Virginia makes it relatively easy to update a will, trust, and other estate planning documents. This is a great time to speak with an estate planning attorney to assess all your documents and how updating your will or trust, along with incorporating other estate planning documents can best provide for you and your family for decades to come.

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

DIY Estate Planning…Is it Worth the Time and Trouble?

The Internet has made it very easy to find answers and instructions on just about anything, including how to develop a do-it-yourself (DYI) estate plan. There are websites and software packages, along with DIY estate planning books and kits that tell prospective customers that you no longer need an attorney to create a will, trust, durable power of attorney, or advance health care directives.  If you follow the simple instructions you’ll create your own estate planning documents that will be both legal and enforceable. Though you’ll often hear the argument that it’s inexpensive and easy and that a DIY estate plan is better than nothing at all, the consequences of not fully understanding the process and making a mistake to save a few dollars are often too great.  As you consider your options, here are a few serious potential pitfalls of creating a do-it-yourself estate plan.

Valuable attorney advice…speak with an expert

Do-it-yourself wills and trusts, as well as other documents, lack the most important component of a solid estate plan… the advice and counsel of an estate planning attorney.  DIY estate planning sources provide forms, but don’t provide legal advice.  If you read the fine print, they make it clear that they are prohibited from giving legal advice and are never a substitute for an attorney.  Your estate plan involves much more than the production of documents. The most crucial aspect of any properly created estate plan involves an in-depth discussion about not only your estate, but also your specific wishes and goals.  A good estate planning attorney is both an investigator and an educator.  It’s impossible to know, without legal knowledge and experience, what the best solution is to your individual situation. The actual documents produced are simply the tools used to put a plan that has been specifically tailored to your circumstances, wishes, and goals, into effect. Estate law is determined by each state and the laws that govern an estate are determined by the state where the person resides when he or she dies. Individual state laws vary greatly on a lot of estate issues, including requirements for executing estate planning documents. Some online companies offering DIY estate planning documents assure consumers that these documents comply with requirements of the maker’s state of residence.  But that may not be the case.  An estate plan that is completed by a Virginia estate planning attorney will be written to comply with all current state laws.

Do you really want a one-size-fits-all plan?

Though online estate planning software may produce a legally enforceable document, it is not flexible. It’s a one-size-fits-all, fill-in-the-blanks solution. It minimizes many of the available estate planning options that might be best for your situation, in order to create a process and document that is easy for you to comprehend and follow. The simplicity built into the online process usually cannot and does not address many of the more complicated, yet common areas that may be specific to your circumstances.  For example, the estates of families with young children are much different than those with adult children no longer living at home, or those of families with a special needs child. The software treats all these scenarios the same way and asks the consumer to make estate planning decisions, often without the expertise or understanding to do so wisely.  Simply put, DIY estate plans do not have effective tools that protect the estate or the beneficiaries.

Are you making mistakes that jeopardize your estate plan?

Do-it-yourself software is typically set up to only handle simple estates and can’t deal with even the most common complexities such as children from a prior marriage, property that has appreciated in value resulting in capital gains, or estates that are large enough to be subject to estate taxes. In addition, DIY solutions generally fail to take advantage of sophisticated estate planning strategies because a one-size-fits-all package can’t account for an individual’s unique circumstances. A DIY estate plan is made by going through an online questionnaire and there is always the risk of inadvertently making an error because you don’t understand the instructions or legal terms, give an incomplete or inaccurate answer, or even skip a question that doesn’t seem relevant to you. If any of those things happen, one of two results may occur: either your estate plan doesn’t do what you think it does, or it could be invalid in part or in its entirety. The result is that the documents you create could include omissions or contradictions, be invalid, ineffective, or contain legal language that has consequences which you never intended.  All of this can complicate the administration of your estate.  Since your DIY estate planning documents are not reviewed by an attorney, you might not know if that is the case during your lifetime. But unfortunately at your death, your beneficiaries will find out and may suffer the lasting and potentially expensive consequences of your mistakes.

Make sure your final wishes are carried out

Saving time and money by making an online DIY estate plan may sound like an appealing idea, but there are many pitfalls and risks. The best way to ensure that your wishes for taking care of your loved ones and distributing your property are carried out after your death is to consult with a knowledgeable and experienced estate planning attorney. In Virginia, Melone Law, P.C. is here to help. We offer a full range of estate planning and probate services including wills, trusts, powers of attorney, living wills and advance health care directives, estate tax planning, guardianship and conservatorship, and representation for contested estate matters.

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

Case Study: How Does a Revocable Living Trust Work?

In our last blog, we discussed revocable living trusts and their benefits.  In this blog, we’ve created a simple case study to illustrate the value of a living trust and estate planning, and how it is used once the grantors have gotten older, incapacitated, or have died. Meet Jim and Susan.  They have been married for over 45 years and are now in their 70s.  They own their home, outright, and other possessions they’ve accumulated over the years (furniture, jewelry, artwork, etc.)  They own a small beach house in Bethany Beach, Delaware.  They also have bank accounts, retirement accounts, life insurance policies, and a small investment portfolio.  They both receive monthly Social Security benefits, and Jim also receives pension benefits now that he’s retired.  Their estate does not exceed the Federal Estate Tax Exemption ($5,490,000 in 2017.) Working with an estate planning attorney, Jim and Susan executed a revocable living trust when they were in their late fifties and at that time transferred all of their assets into the trust.  They named themselves as co-trustees so that they both would have control of their assets, and named their son, John, as successor trustee after their death or incapacitation to continue to manage their assets and/or disperse them to their beneficiaries. Their estate planning attorney helped them complete their estate plan by drafting a living will and advanced healthcare directives for each of them so that their personal wishes regarding life support and healthcare can be followed.  They also each have a durable power of attorney naming their spouse as agent.

Incapacitation and death

Jim developed Alzheimer’s disease in his late 60s.  He can no longer make decisions for himself and Susan can no longer take care of him.  Susan, with the help of Jim’s doctor, decided to put Jim in a nursing home.  Because of the healthcare directive, she will not have to go to court to be named his legal guardian and will be able to make decisions about his personal care.  Susan also became the sole trustee of the trust without any court action being required and can use the trust assets for Jim’s care. Between her authority in the power of attorney and as trustee, Susan does not need to petition the court to be Jim’s conservator and she can make financial decisions on his behalf right away. Two years later, Susan had a stroke and could no longer take care of Jim’s or her own affairs.  Her son, John, becomes successor trustee without having to petition the court for guardianship or conservatorship of either parent, and uses the assets in the trust to take care of both Jim’s and Susan’s needs. After the death of his parents, John took care of their funerals and related expenses, paid all final bills, and filed the appropriate income tax returns.  Within a month or so, John distributed the estate per the terms outlined in the trust documents.  No probate or other legal proceedings were required or necessary, even for the out of state beach house in Delaware.

Advantages of the Living Trust

  • Though the upfront costs of setting up the trust and funding it are usually more expensive than a last will and testament, the savings of numerous court proceedings and probate, later on, may make it worthwhile.
  • When the trust is prepared correctly, it avoids all probate. It even avoids multiple probate proceedings in different states where real estate or other assets are located.
  • By avoiding probate, money and other assets in the living trust are almost always distributed sooner to the beneficiaries.
  • The trust is a private document. Some financial institutions may require or request copies of the trust agreement before complying with its terms, but there are no public aspects to a trust as there are with a will and probate.
  • You will save attorney’s fees and costs, as well as time.  The successor trustee does not have to deal with probate or court appearances for guardianship or conservatorship proceedings when the grantor(s) become incapacitated or die.
  • A trust is flexible and can be changed or even cancelled at any time. As long as the grantor’s intentions can be expressed in words, they can be embodied in a trust.
  • A trust is easy to amend. It can be amended by a document signed only by the grantor. No witnesses or other formalities are necessary as with a will or codicil.
  • Copies of a trust document can be used as a substitute for a lost original. If an original will is lost or misplaced, the law presumes that the will was revoked, and someone will have to petition the court to use a copy in place of the original will. If the copy is not validated, the estate will be distributed to the beneficiaries according to the Commonwealth of Virginia law.
  • A trust is more difficult to contest than a will or codicil, because the grantor not only signed the documents but acted on them.

About Melone Law, P.C.

Melone Law, P.C. is a general practice law firm based in Reston, and serving the Northern Virginia area.  Our practice areas include Family LawDivorce & Special Needs ChildrenTraffic Ticket DefenseDUI/DWI Defense, and Trust & 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 and revocable living trusts, contact our office today at 703.995.9900 or visit our website:  www.MeloneLawPC.com.

Estate Planning: Is a Revocable Living Trust a Good Option?

A revocable living trust in Virginia, also called a living trust or inter vivos trust, has become a popular estate planning option because of the many benefits it offers.  A revocable living trust is flexible and the terms can be changed at any time, or the trust may be cancelled entirely. Currently, about 20% of Americans have living trusts as part of their estate plans.  A living trust may help you avoid the costs and aggravation of probate, preserve privacy, and offers ease of transition of your assets to your beneficiaries after you die.

What is a Revocable Living Trust?

A living trust is a legal document that holds the assets of the trust creator, known legally as the grantor, in a trust for his or her benefit during their lifetime. When creating the revocable trust you will need to name a trustee who has the responsibility of managing the trust assets. You can select anyone, but the most common practice is to name yourself so that you can maintain control of your assets while living. You will also need to choose a successor trustee to step in after your death or incapacitation to continue trust management and distribute the trust assets to your beneficiaries according to your directions. The successor trustee can be a relative, friend or an organization like a financial institution.

What are the benefits of a living or revocable trust?

Control of your estate

A living or revocable trust provides control of your estate, even after death, by setting out a clear plan to deal with all of your assets.  Although the assets are technically owned by the trust, you continue to use them as you normally would. You live in your home and spend your money as you wish. After your death, your estate will be handled exactly as you wish since the assets stay in the trust until the dates you have chosen for distribution to your beneficiaries. You may choose specific ages for beneficiaries to inherit or even set up a monthly allowance or other schedule.  You can provide extended care for a loved one with special needs and protect specific assets from others.  If, on the other hand, you pass your assets with a will, they are distributed once probate has concluded.

A Living Trust Avoids Probate

Probate is the court-supervised process of distributing a deceased person’s estate. Depending on the size and complexity of the estate, as well as the assets and individuals involved, probate may become a lengthy and costly process which can delay distributions to your beneficiaries and decrease the amount that they inherit. The Commonwealth of Virginia has not adopted the Uniform Probate Code, so its probate procedures are lengthy and may be complicated. A trust avoids all of this red tape and allows you to pass your assets to your beneficiaries immediately upon your death, if you wish, unlike a last will and testament which cannot distribute assets until probate has concluded. By placing your property in a living trust, you can avoid probate and those additional costs. Instead of the court supervising the distribution of your estate, the successor trustee distributes assets according to the trust creator’s instructions. This can mean a faster distribution to your heirs.  Probate may take months or years to resolve. Distribution by the successor trustee may only take a matter of weeks. The avoidance of probate may be particularly helpful if you own property in other states, like a vacation home, as it would pass directly to your beneficiary through the trust and not be subject to probate in another state. A note about cost savings:  Though there may be savings in probate costs, the initial up-front costs of setting up and funding a living trust are more expensive than creating a last will and testament.  A revocable living trust does not protect your assets from federal estate tax, Medicaid spend down, or creditors.

If you become incapacitated

If you become ill or incapacitated and can no longer take care of your own financial affairs, the person you have chosen as successor trustee can step in without the intervention of a court. All of your assets are already owned, controlled, and managed by the trust. In this way, you can avoid a conservatorship proceeding.  While a durable power of attorney can be rejected, a trust cannot.  Your financial life is protected by the trust.

A living trust protects your privacy

A living trust protects your privacy since its terms, assets, and beneficiaries are never disclosed to the public. Unlike a will, a living trust is a private document between the parties involved, and does not become part of the public record. No one can later go and search public records to find out more about the distribution of your estate.  A will is a public record, so everything in it becomes public as well.  Avoiding the probate process will help protect your privacy.

A “pour-over” will

Even if you have a revocable living trust, it is still important to have a last will and testament.  When you have a living trust and a will, the will is often referred to as a pour-over will because it’s designed to catch any unfunded property or other assets that have not been transferred into the trust.  A will may also outline your final wishes, something you generally do not put into a living trust document. A pour-over will is a safety net.  It simply states that any assets that have not been transferred into your revocable living trust should go there when you die.  In other words, it names your trust as the beneficiary of any property that it does not already hold or that does not pass directly to a living beneficiary through other means, such as a beneficiary designation on a retirement account or life insurance policy.  A pour-over will requires probate. If you don’t include a pour-over will in your estate plan, any property not funded by your living trust, will pass to your heirs according to Virginia intestacy law. This means that if you forget to fund your new vacation home into your trust and you don’t have a pour-over will, or any other type of will that directs the property to someone specific, the Commonwealth of Virginia will decide who inherits the home based on its laws. In addition, if minor children are involved, the pour-over will can also be used to name potential guardians.  This is most important if you are a single parent or if your spouse is unable to provide the care your children will need.

Contact Melone Law, P.C.

Having a comprehensive estate plan in place can ensure you minimize court costs, legal fees, and tax implications for you and your loved ones.  If you are considering a revocable living trust for your estate, speak with a knowledgeable and experienced estate planning attorney to learn more about the benefits and disadvantages of a revocable living trust on your life, assets, and family.  Call today at 703.995.9900 to set up a consultation.

Estate Planning Documents for Adults with Special Needs

Thanks to technology and medical research, more and more children with special needs are living productive lives well into adulthood, making it more and more likely that they will outlive their parents. As a result, parents must plan for their adult children with special needs. A significant number of these adult children with special needs will require government programs such as Medicaid and SSI as well as other programs. The problem lies in the fact that the resources considered to be available to a special needs adult can reduce, or totally eliminate, that person’s eligibility for such programs. A carefully-crafted special needs trust can preserve the eligibility for government benefits while providing additional financial resources for the special needs adult.

Self-Settled Special Needs Trust

While a special needs trust is considered the “centerpiece” of any estate plan intended to benefit a special needs adult, there are other pertinent documents as well. One of these is a self-settled special needs trust, which is funded with the child’s own assets, such as an inheritance, accumulated wealth or a personal injury settlement. Any type of asset which the disabled adult has the legal right to use without restriction can be placed into a self-settled special needs trust. There are downsides to this type of special needs trust, however, so it is important to consider the following:
  • Medicaid must be reimbursed from the self-settled trust for benefits received by the beneficiary, upon the beneficiary’s death;
  • A self-settled special needs trust can limit the types of payments made by the trustee;
  • A self-settled special needs trust may, in some instances, require an annual payment be made to Medicaid;
  • The assets in a self-settled special needs trust will be taxed as though the assets still belong to the beneficiary;
  • The beneficiary must be under the age of 65 for a self-settled special needs trust to be established, and
  • If the rules of a self-settled special needs trust are not followed to the letter, the beneficiary’s eligibility for SSI or Medicaid could be compromised.
Other aspects of an estate plan which must be contemplated when considering the future of a special needs adult include the following:
  • When you are planning for the future of your child as a special needs adult, you may not want to name that child as beneficiary of your retirement plan or retirement account, as this could make them ineligible for government assistance programs. A better choice might be to leave your retirement plan or individual retirement account to another beneficiary, then make an equalizing gift of other assets to the special needs trust.
  • If you currently have term life insurance, you might want to purchase a permanent life insurance policy. While this type of policy is more expensive, you can expect this type of policy to more fully provide for your special needs adult child, no matter your age at death. Permanent life insurance does not require you to re-qualify for life insurance once the policy is in force. If you are in deteriorating health, it can become difficult to continue to qualify for a term life policy.
  • If your adult child with special needs will require some level of caregiving, you will want to make sure to have a will which has a provision appointing a guardian, as well as a successor guardian in the event of the original guardian’s incapacity or death.
  • Many estate planning attorneys will advise clients seeking to ensure the future of an adult child with special needs to have a nonbinding letter or statement of wishes regarding care and custody of the adult child during the interim, before the guardian has taken over the duties. There is usually a period of time before the payment of life insurance proceeds and the appointment of a successor guardian when everything is somewhat “up in the air.” Thus, a nonbinding letter can advise those taking care of the adult with special needs about medications, dietary restrictions, housing arrangements, and any other pertinent details.
While taking care of all of the above issues is important, as noted, a special needs trust is the backbone of any estate plan for parents of an adult child with special needs. Your Virginia estate planning attorney can offer practical short and long-term considerations tailored to your unique situation, and the nature of your adult child’s disability. There may be others in the family, such as siblings, grandparents, aunts or uncles who want to help provide for the adult special needs child in their own estate plans, therefore the special needs trust could apply to others, in addition to the parents. The experienced Virginia estate planning attorneys at Melone Law, P.C. can help parents and relatives of an adult with special needs to ensure that assets will pass to the child, but will not be considered available assets for the purpose of governmental assistance. Contact us today for a consultation.
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