Understanding A Health Care Power of Attorney: Do You Need One?

Every American should have access to a health care power of attorney that has been drafted or reviewed by an experienced estate planning lawyer. This is a document that you hope that you never have to use but one that will make things much easier for your family in times of distress.

In this document, as the principal person, you can direct another person to be able to make health care choices on your behalf, if you become unable to communicate your own health care decisions or suffer from an incapacity that makes you unable to make these decisions on your own.

Some physicians will consider seeking out health decisions and input from adult children or a spouse, but you should still name a party in this legal capacity. This document becomes even more important if you do not have a person available to you to make health care choices on your behalf or if there is contention among the family members about what is right for your care.

While everyone can benefit from a health care power of attorney, those most at risk for having problems with this include single people, young adults, unmarried partners, and those who do not trust their family members’ judgement. Giving your friends and family peace of mind because they know your plan is another added benefit of creating a health care power of attorney. Contact our office in Virginia Beach for a phone call discussion about your POA today.

 

 

How Much Money Will Be Inherited In 2020?

Do you have assets that you plan to pass on to your loved ones? Are there baby boomers in your family with substantial assets that will pass as part of their estate? Whatever your situation, you need to estate planning and an understanding of inheritance options to reflect on its impact on your life.

A recent study found that Americans will inherit $764 billion this year, the vast majority of that money passing on tax-free. This is according to a paper recently published by the Brookings Institution. Current laws around inheritances mean that Americans and their estates are required to pay for 40% on bequests and gifts to heirs. However, there are multiple ways to avoid this tax, since the tax-exempt level for a married couple is $23.2 million.

The Brookings Institution paper indicates that there is a potential proposal being put forward to tax income from inheritances at higher rates than income from work. The estimated proposal, according to those who created it, could raise as much as $1.42 trillion in the next decade.

Although this proposal is not currently adopted and does not affect your estate planning now, it is important to have an established relationship with an experienced estate planning attorney who can help you adjust if and when estate level and federal level tax changes occur.

Our Virginia Beach estate planning law office stays up to date with all relevant state and national laws and the impacts they have on your estate planning.

 

 

Have You Answered the Right Estate Planning Questions?

Most people assume that creating a will is the beginning and the end of their estate planning but failing to incorporate all different aspects of planning could increase the chances for fights or confusion after you pass away.

Most people want to minimize these challenges and any potential obstacles that their heirs could face. If you’ve already done the work within your estate to think about how you want your assets to be distributed after you pass away, don’t make the mistake of assuming that this means your estate is properly planned. The typical executor in an estate has over a hundred tasks to handle in closing out the estate.

If you’re not sure whether your estate is fully updated and ready for an executor to manage, consider the following questions as you sit down with a Virginia Beach estate planning attorney:

  • Is your will current and has it been recently updated?
  • Does your will go into enough detail about what you wish to pass on with specific possessions?
  • Are your desires explained in a way that is legally binding?
  • Have your financial affairs already been organized?
  • Have you already planned for a memorial or funeral service?
  • Do you have clear methods in place on how the assets inside your estate will be divided up by heirs?
  • Have you made arrangements for the care of those who live longer than you do?

All of these complex issues can be discussed and managed in a meeting with a knowledgeable Virginia Beach estate planning lawyer.    

 

 

Should You Give All of Your Assets to Your Adult Child?

Deciding whether or not to gift something over the course of your life or to pass it on once you are no longer around is an important decision, especially with regard to the federal gift tax. Every person can gift up to $15000 per year free of gift tax. This means that you do not have to file a gift tax return and that no taxes have to be paid on that amount.

Very few Americans will have to worry about the estate tax given the current exemption amount. But passing everything on to one child can be an extreme choice and could have risks that you might not know about.

First of all, this means that one child will own everything, and this was passed on while you were still alive. You as an individual or as a couple could become financially dependent on them for everything that your current income stream does not cover.

If your loved one receives all of your assets but changes their mind about taking care of you, there is nothing you can do about it. Furthermore, if your child goes bankrupt, divorces or dies, the money could also be lost. Consider any potential and capital gains tax implications in making any transfers and decide with the assistance of an experienced and trusted lawyer the most appropriate course of action.

With all that should be considered in passing on assets, turning to a trusted Virginia Beach estate planning law firm helps you pin down all the details and leave behind a thought-out plan for your loved ones.

 

Passing on Your Special Collection to Loved Ones

No matter what you collect, be it stamps, coins, art, or classic toys, you probably have devoted a significant amount of money as well as time to pursuing this passion, but have you done the forethought to think about what will happen to your collection if you pass away?

Many people don’t like to think about how incapacitation could influence their future. However, doing no planning at all can leave your loved ones in a confused and overwhelmed position as they confront the world of your possessions. They might not appropriately know how to value these or the best way to pass them on.

This means that your loved ones could sell them for pennies on the dollar or donate them even if these assets in your collection hold sentimental value or monetary value. When it comes to planning for your estate with your collection, be specific about wishes. Keep current market values of these items up to date and have a detailed listing of your collection.

Talking to an auctioneer in advance and leaving contact details will make it easier for your loved ones to decide the next step. You might also consider purchasing specialized insurance, but bear in mind that collectibles are often more difficult to ensure.

If you want your loved ones to sell all or part of your collection, talk to an auction house or a dealer that might be able to manage the sale for your loved ones. It is unlikely that your loved ones will have the level of expertise and awareness you do about your own collection. Partnering with someone else who does have this knowledge or can connect them with the right people can be extremely beneficial during a very challenging time in their life. Talk to a Virginia Beach estate planning lawyer today.

 

Not Married? You Still Need an Estate Plan

As an unmarried couple, you might assume that you don’t have as much at stake if something were to happen to you or your partner. Whether you’ve legally tied the knot or not, you still need to think about how to protect yourself and your loved ones.

Adding children to your family is certainly an excellent opportunity to revisit and revise your estate planning tools and documents, but this doesn’t mean that you shouldn’t neglect the process of estate planning now while you have the opportunity.

Many different estate planning tools and strategies can be used while you are still alive. Some of the most important relate to empowering someone else to make decisions on your behalf if you are no longer able to do so. A financial or medical power of attorney authorizes another agent acting for you to make these decisions if you become incapacitated and cannot render them on your own.

These documents can be instrumental for you to have if you have specific wishes or intentions so that you can discuss these with your spouse, or any other person appointed as your power of attorney agent. Furthermore, unmarried couples can benefit from estate planning in terms of a discussion about who will receive your assets if you pass away. Unmarried partners, however, do not benefit from the same laws that protect married partners.

There are laws in place to protect spouses and couples where at least one person has failed to plan properly. But this does not mean that these same protections extend to unmarried couples. From beneficiary designations to a durable power of attorney to joint ownership; there are many different options available to unmarried couples that should be discussed with a Virginia Beach estate planning lawyer.    

 

 

What Is a Payable on Death Account?

You might discover in the process of administering someone else’s estate or in structuring your own estate the existence of a payable on death account. A POD account is an arrangement between a credit union or bank and a client that designates the beneficiaries who will receive all of the assets belonging to that client.

This immediate asset transfer is triggered when the client passes away. Any person with a certificate of deposit at a bank can determine a beneficiary who is eligible to inherit any money in the account after his or her death. A named beneficiary on such a bank account will be referred to as the payable on death account.

One of the primary reasons that people opt for payable on death accounts in Virginia is to keep this money inside a bank account outside of probate court in the event that the owner of the account suddenly passes away.

Designating a beneficiary is an easy and free service that allows for the transfer of savings bond, savings accounts, checking accounts, security deposits and other deposit certificates. In order to do this, you must visit your credit union or bank to discuss it.

Your primary responsibility here is to notify the bank of who the beneficiary should be. A completed form filed with the bank will give that financial institution the right authorization to convert the account to a payable on death.

The beneficiary named in a POD account is not eligible to receive any of the money in the account while the account holder is still alive. However, when the owner of the account passes away, the beneficiary becomes the automatic owner of the account allowing this to bypass the traditional estate process. Want to create other tools for estate planning? Schedule time to speak with a VA Beach estate planning attorney.

 

 

What’s the Cost of Skipping Out On Estate Planning?

There are many different fears that lead people to avoid engaging in the estate planning process. It might seem like this is something it isn’t applicable to you because of your overall good health, young age or belief that you have many years left to sort this out.

However, failing to accomplish estate planning leaves this burden behind for your loved ones in the event that you suddenly become incapacitated, disabled or are no longer here to accomplish your estate planning goals.

This can create a complicated and conflict-ridden situation for your loved ones and it can be easily avoided by scheduling a consultation with a knowledgeable estate planning attorney. Fear of expense is one common reason that many people avoid accomplishing their estate planning goals.

Estate planning really isn’t about you, it’s for those people you leave behind. When you really think about it, estate planning is a gift for your family because it is the opportunity to care for others. Leaving behind a well-designed plan can help your family navigate during one of the most challenging times in their life. Arrange your affairs to the most good that they possibly can for philanthropy, friends, and family.

You can ask your estate planning attorney in Virginia Beach upfront during your initial meeting how he or she charges. You are likely to get valuable information that can help you figure out how to proceed with estate planning and get the peace of mind provided by engaging in your planning now.

 

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.