Do I Really Need Life Insurance Beneficiaries?

So you already have a life insurance policy in place as part of your estate plan- smart move. As part of your application and final policy approval process the company probably gave you a beneficiary form.

This form is extremely important and should not be ignored. Even if you write in your will that your life insurance policy will be given to a certain family member, you should know that the forms filed with the insurance company for your beneficiaries take precedence when your estate is administered.

This is also because your estate passes outside of the traditional probate process. These forms are key for telling the insurance company who gets all or part of your policy proceeds, so they should be filled out and then reviewed each year as well.

If you’re new to life insurance as part of your overall estate plan, you are not limited to just one beneficiary. You can list both a primary and contingent beneficiary so that there’s a backup, and you can split the proceeds of the policy between different parties so long as you allocate these percentages properly on the beneficiary forms.

Most people use life insurance policies to help when there is a need for general living expenses or for a big expense like paying off a mortgage or for a child’s college tuition. Since a will can get tied up in probate for a long period of time, the life insurance policy can help your family get back on their feet sooner rather than later.

In conjunction with a will, a trust, and other estate planning tools, you’re empowered to cover a lot of bases with your Virginia estate plan. If you have questions about the process or need help creating these documents, a Virginia estate planning lawyer can help you create a comprehensive and unique strategy.

Should You Name an Independent Executor?

One important part of the process of creating a will for your estate is choosing who will serve in the role of executor. The executor has to play many important roles in the management of your estate, including all the paperwork.

If you don’t anticipate any major problems with your estate or arguments within the family, a family member can be named as an executor. While your surviving spouse might have the most inside information about your plan, that person can easily be too overwhelmed with grief to deal with everything that a daughter or son might be able to handle on their own.

Since there is the possibility for conflict with various family members, you might choose to name an independent party as the executor of the estate. An independent trust company or a bank trust department can handle all of these aspects of your estate.

A big reason for selecting an independent party is the desire not to put your loved one into the position of taking on the fiduciary responsibility. An executor has to pay due estate taxes, file an estate tax return, and then distribute any remaining assets to the living heirs.

In the event that the tax return gets audited into the future and it’s determined that more money is due, that estate executor is formally responsible for that. It’s unlikely that some heirs would be willing or able to give back their portion of assets to cover a remaining balance with the estate tax return or audit. The liability gets shifted away from a family member when you install an independent party into this role.

Your Virginia estate planning lawyer can give you more information about how the process works.

What is Elder Financial Abuse?

Are you concerned about your elderly loved one being exposed to potential financial abuse? Elder financial abuse has a broad reach across not just Virginia but all over the country. There are three big reasons why the elderly are often targeted: cognitive and physical changes associated with aging, dependency on other people, and the volume of assets that some elderly people accumulate in their older years.

At the end of 2017, retirement assets in the U.S. for people over age 65 and above were $28.2 trillion. This means that many older people could be targeted as victims of elder abuse.

Unauthorized or illegal acts to deprive an older person of their money or other assets could be defined as elder abuse. Using the resources of an older person for personal gain or profit could mean that the assets your loved ones has worked so hard to build could be decimated.

Financial abuse affecting elderly people can include procuring a power of attorney through fraud or engaging in practices that provide unauthorized access to an older person’s assets. It’s believed that senior citizens lose about $3 billion per year as a result of elder abuse.

Elders most likely to suffer financial abuse include those living in long term care facilities, those who have lost a spouse recently when that spouse handled the finances, and seniors who rely on others for personal care.

Protecting your loved ones from elder abuse begins with the right estate planning documents. Contact the office of a Virginia Beach estate planning attorney today.



Should I Transfer My IRA to My Spouse in My Estate?

There are many different rules associated with passing on an IRA to a beneficiary.

In addition to filling out the company specific forms to determine the designated beneficiary to receive these account assets, it’s important to decide which person in your family for whom it makes the most sense to receive these particular benefits.

In the event that a person inherits an IRA from a deceased spouse, the survivor gets the most leeway in terms of the available choices. These choices include:

  • Treating the IRA as if it were their own retirement account and renaming it in their legal name.
  • Treating the new recipient as the beneficiary of the plan.
  • Rolling over the IRA into another account such as a qualified employer plan or another IRA and treating the IRA as if it were their own.

There are additional choices and decision points that might be raised by each course of action. The age of the account beneficiary at the time that the IRA is inherited could also have important tax implications.

A spouse is not the only person who is eligible to receive an IRA, but it might make the most sense as they have more choices available to them than other types of beneficiaries. Sit down with your experienced estate planning attorney in Virginia Beach to discuss the options available to you and whether or not a spouse makes the most sense as the beneficiary.



What is the Difference Between a Living Will and a Healthcare Proxy?

A living will enables you to state your wishes for end of life care whereas a health care proxy allows you to enable another person to step in and make medical decisions on your behalf. A health care proxy might also be referred to as a health care power of attorney and it is a document in which you enable your power of attorney agent to make medical decisions for you if you are unable to do so yourself. It’s a good idea to have both of these documents in your estate planning.
The specific rules for each of these documents will vary from one state to another so it’s important to consider what state you claim residency in. Both of these documents enable you to have some level of control over what happens to your future if something happens to you.
A living will would become activated if you do not wish to be resuscitated or if you reach a medical condition upon which doctors believe it is not going to be possible for you to recover. A health care proxy, however, enables this individual to have even greater levels of decision-making power based on you becoming incapacitated.
If you were suddenly incapacitated for a period of several days because you were involved in a car accident, for example, your power of attorney agent would be able to make decisions about your health care needs and concerns. This is why it is important to establish only an individual you truly trust in such a role.
A consultation with an experienced attorney is instrumental in helping you to define whether or not the agent you have established is appropriate for estate planning purposes and your individual needs.
Make sure you sit down with your lawyer to discuss all of the aspects and choices available to you so that you can arrive at a conclusion that is most suited to your individual concerns.
You should fully trust the person who is established as your power of attorney agent or you certainly hope that this agent never has to take action and represents your best interests. It’s a good idea to have such a plan established already because you cannot plan too much for the inevitable. Talk to your VA estate planning lawyer now.

IRA Estate Planning Basics for Virginia Residents

Several different types of retirement accounts, including 403(b) accounts, individual retirement accounts and 401(k) accounts, are often a part of individuals’ estate plans. These must be dealt with accordingly as it relates to passing these on to other parties.

The passing on of an IRA often requires filling out a beneficiary form with the IRA company directly, since these pass outside of probate and will related documents. Tax deferred retirement plans like IRAs are unique because unlike most inherited property, withdrawals from retirement accounts are taxed as income for the recipient.

A designated beneficiary is the person who is named by the plan participant as the formal beneficiary of the plan. When planning ahead for distribution of an IRA, it is important for the party owning the IRA to think about the potential tax ramifications for the beneficiary. Under a rule known as the five-year rule, the entire account balance in the IRA must be distributed within five years of the participant’s death, regardless of who receives these assets in the distribution.

Distributions under this five-year rule can be very expensive due to the eliminated possibility of extending tax deferral. If you plan to pass on an IRA to a beneficiary of your estate and need further information about how to appropriately plan for this, schedule a consultation with an experienced estate planning lawyer in Virginia to discuss these options.



How Long Does it Take to Settle a Full Estate in Virginia?

There are many complex steps required in settling an estate in Virginia. This process can be complex and lengthy, particularly, if one or more beneficiaries argues to have an executor removed or claims that the will is invalid.

An executor or an estate administrator could even put off dealing with an estate because there are no clear statutory deadlines by which the probate process must be completed. In some cases, the probate process can drag on for several years often to the detriment of the beneficiaries that the deceased intended to have assets relatively quickly.

As a person drafting your own estate planning documents, it is critical to understand executor responsibility.

The appointment of a representative for the estate is one of the most important decisions made in the probate process. The administrator or executor is responsible for gathering all of the decedent’s assets, paying debts, selling property if necessary, notifying creditors, and distributing any remaining assets to the beneficiaries named in the decedent’s will.

There are interim deadlines that an executor must meet during this process, but there are no final deadlines that govern how long the entire process must take. When selecting your own estate executor, it’s important to think about this person’s qualifications and willingness to serve in this role, since he or she will be so intimately involved in the administration of your estate.

Need help figuring out who to name? Speak to your Virginia attorney today about the most important roles in your estate planning.



Can Someone Be Removed as an Executor in Virginia?

An executor is the person associated with the administration of a Virginia estate of a deceased individual during probate. The court can appoint this person named in the will as executor.

In some cases, however, this person is also named as a beneficiary in the will and is an heir to the estate property. In the event that you or another family member and you are concerned that an executor could be abusing their authority, Virginia law does enable you to petition for his removal. It is very important to understand this process as any type of heir in a Virginia estate because this can significantly slow down the process of estate administration.

Good cause for removing a Virginia estate executor can include bankruptcy, death, resignation, self-dealing, failing to perform duties, fraud, gross negligence, and more. If an executor is removed from an estate, Virginia law requires that a successor executor be appointed by the court to replace that person, so long as the successor executor is qualified.

In order for a successor executor to be qualified to serve in the probate of an estate, this person must be a legal adult, mentally competent, and consent to the appointment.

As a person putting together your Virginia estate planning documents, it is important to understand how the selection of your initial executor and successor executor could impact the administration of your estate after you pass away. Schedule a consultation with an experienced Virginia attorney to discuss who should serve in the role of an executor and successor executor.


When Does Probate Start in Virginia?

Losing a loved one presents many questions, challenges, and tasks that all must be addressed within a relatively quick timeframe after the loved one passes. One of these necessary tasks is opening the estate in probate. Probate can start shortly after the loved one passes away, ideally within one week after the deceased has passed.

This process refers to the formal proving and recording of the will in which it is determined that this document is valid as the final testament of the deceased. There is no distinct probate court in Virginia.

Instead, the will is managed through the circuit court for the region in which the deceased person lived at the time of their death. For loved ones, this might mean travel into another area of Virginia if that loved one intends to probate the will and estate. In most cases with a will, the person appointed for probate administration will be named in that document.

To probate a will or to qualify on an estate, you’ll need to take the original will to the circuit court office. It’s a good idea to set up an appointment in advance if you can because the court might give you some forms to complete prior to the appointment.

Before coming to this meeting, make sure you’re aware of all the assets owned by the deceased party. If the deceased made an inventory of their assets prior to passing away, this makes it easier for the person starting probate to have an accurate snapshot for the estate.

In addition, ensure that a copy of the death certificate is included with any provided forms and the asset inventory.

Are you ready to talk through your options with a Virginia estate planning lawyer? Your attorney can help you name the party who will initiate probate when you pass away, making things easier for your loved ones.

How to Prepare to Write Your Will in Virginia

A will is a document that has far-reaching impacts, so it’s important to think carefully about what information you need before you get started. The right will can ensure that the proper person gets guardianship of any children, too.

Your will is truly the last statement you make to the world, so it goes beyond naming who gets which of your belongings. While you can make updates to your will throughout the course of your life, the terms of your will remain fixed after you pass away.

Your will should be created in line with the laws of your state of residence. To make a will in Virginia, you need to consider the following steps:

  • List out all of your property
  • List out any and all debts that you owe
  • List potential heirs who you might want to receive something that you own (include both the first and the last names)
  • Line up the assets on your list with the right heir. You do not have to distribute your belongings equally or give something to every person
  • Consider whether or not any conditions might apply to certain gifts and whether or not a trust is a better vehicle for passing those on than your will in Virginia
  • Choose a guardian for any minor children
  • Review this list to make sure you haven’t missed any details

Many people overlook the opportunity to discuss your intended plans with a lawyer, but this can be a big help when you’re concerned about many aspects of your estate plan. An attorney can review your details and point out any information you missed and whether or not there are other and better ways to accomplish your specific goals.

Don’t wait to reach out to a lawyer about creating your will in Virginia. It’s an important first step towards protecting your future.