What a Trustee Needs to Know About Making Final Distributions to Beneficiaries

Although beneficiaries of a trust will naturally have questions earlier on in the process, the concept of when they’ll receive their check or the assets set aside for them usually needs to be answered later on. Making distributions of remaining trust assets comes at the end of the process when a trustee is settling a revocable living trust.

This is because the successor trustee has to ensure that every single expense and fee associated with administering the trust or the related probate estate have been settled and that all taxes have been paid or money has been set aside to pay those final taxes and bills. If the trustee chooses to make distributions to the beneficiaries and expenses come up down the line, that person will then have to pay those expenses out of their own pocket.

If it is anticipated that the administration of the decedent’s trust will take longer than 12 months, the successor trustee might need to reach out for additional resources, such as hiring a trust attorney and an accountant.

This can ensure that enough assets are appropriately set aside to pay ongoing expenses of the trust and then allow for those final important distributions to be made to the beneficiaries of that document. Schedule a consultation today with a trust planning lawyer in Virginia Beach to learn more.

How Should I Fund an Investment or Bank Account in My Name Into a Trust?

When you are moving assets into a revocable living trust, it’s important to remember that the guidance of an estate planning attorney can be instrumental in making this process easier.

Funding brokerage investment or bank accounts into your revocable living trust could be complicated or easy depending on the specific rules of the institutions involved, so you’ll want to investigate that first.

Some financial institutions, for example, will make it as simple as changing the name on the account from your individual name to that of you listed as the trustee. Others might require that the original account be closed out and a new one be opened in the name of the trust. Regardless of the specific rules for your institution and what it demands for you to jump through, it is critical that you fund investments and bank accounts into the trust appropriately to avoid probate and to plan for other issues.

In addition to appointing yourself as the primary trustee of this estate planning strategy, you will want to name a successor trustee. This is the person that you name to step in and to take over management of your trust if you were to become mentally incapacitated.

The steps for funding an account into your revocable living trust include:

  • Write a letter of instruction.
  • Hand deliver your letter of instruction to a financial advisor or a bank.
  • Complete and return all required documents.
  • Confirm the formal transfer of the account.

For more support with these complex estate planning issues, schedule a consultation with an attorney in Virginia Beach.  


What Kinds of Property Should Be Placed Inside a Living Trust?

Want to use a living trust in Virginia? Or need more information about how a living trust differs from an irrevocable trust? In these cases, educating yourself is a great first step and one that you can follow with a Virginia Beach estate planning lawyer meeting.

Your most valuable property should be included inside your living trust to get the greatest benefit. One of the biggest reasons that most people create a revocable living trust with the help of an estate planning lawyer is to avoid the fees, court involvement and long process of probate. The more an item is worth, the more it could potentially cost to push it through probate.

Some of the most common pieces of property to consider including in your revocable living trust are:

  • Precious metals
  • Security accounts held by brokerages and stocks and bonds
  • Real estate
  • Copyrights and patents
  • Small business interests
  • Valuable works of art
  • Valuable collections

You are eligible to add property to your living trust at any time and since you will likely appoint yourself in the role of trustee in order to manage it, you can also give away or sell property in the trust or remove it and then put it back in your name as an individual. Although a living trust is a popular estate planning tool, it’s certainly not the only way to decrease the possible expense or frustration of probate.


When Does Medicaid Pay for My Virginia Nursing Home?

Does your loved one need to stay in a nursing home due to advanced medical care needs? This might raise a lot of questions from a financial perspective as you and other family members scramble to figure out what to do next.

Not every person in Virginia is automatically qualified for Medicaid so the sudden need for long term care or a stay in a nursing home can present significant financial challenges for you and your loved ones. Virginia’s Medicaid program provides payment for nursing home stays for those without appropriate assets or income and when those same people have been diagnosed for needing assistance with activities of daily living.

Since the cost of long-term care and stays in a nursing home are extensive, Virginia Medicaid is something that must be applied for by an applicant in order to receive payment from the government for these important services. Many people make the mistake of thinking that their private health insurance policy or Medicare will cover these stays. Medicaid is a common source of funding for long term care in Virginia, particularly when other assets have already been used up or sold to pay for long term care expenses.

Nearly 70% of residents inside nursing homes around the country use Medicaid to pay for their care. There’s no doubt that you will have many different questions about qualifying for Medicaid and how this financially impacts your spouse and other family members. Schedule a consultation with a Virginia Beach estate planning lawyer to discuss the specifics of your plan.



Three Tips to Maintain Your Savings in Retirement

Approaching retirement means thinking about your finances and your working life differently. For plenty of soon-to-be American retirees, it’s just as important for them to protect their savings as it is to have a good plan for spending it during their retirement years.

There are many different risks that can impact retirement plans today, most particularly, their impact of long-term care expenses. Three tips can help retirees be more mindful of the balance inside their retirement savings accounts and how best to protect it. The first of these is to look for a fiduciary or a financial advisor who will put your best interests ahead.

There are many different financial professionals who are targeting the retiree market for those who are high net worth. It’s a good idea to work with someone who has a fiduciary responsibility and will help you understand where you are at now and where you hope to be in retirement. The second step is to make sure that you have an advanced wealth planning strategy and a relationship with an estate planning lawyer.

An estate planning lawyer could help you see some of the different ways that your retirement plan could be affected, not only to support you in your older years but to leave gifts behind for your loved ones. Finally, think about the big picture.

Maintaining wealth goes beyond income and investment returns. Look for advice from a variety of professionals that can help you better understand things like health care planning and taxes. For more information about drafting a retirement plan that aligns with your estate planning goals, schedule a consultation with an estate planning lawyer in Virginia Beach today.



Should You Use a Gift Account for Minors?

Expanding your family through the birth of grandchildren is an exciting prospect. It also prompts plenty of grandparents to think about how they could effectively help their grandchildren save.

This is a common goal for many parents as well as grandparents who want to leave behind a legacy and a gift for minor children to help them with education or other goals in their life.

There are many different options available to you to pass on financial gifts to your grandchildren, but some of the most popular are Roth IRAs, 529 college savings plans and uniform transfer gift to minors gifts. UTMA accounts allow for an irrevocable gift to the minor.

These are established with a custodian who is usually the parent of the child. That becomes vested when their fiduciary responsibility for that minor’s account. The major benefit of going with UTMA to gift to your grandchildren is the simplicity.

A trust does not have to be drafted but you will have less control over how those funds are handed over. Each state has rules about when the minor is officially considered an adult and when they receive those amounts.

529 college savings plans, on the other hand, have tax benefits for both the recipient and the giver. Scheduling a consultation with a Virginia Beach, VA estate planning lawyer can help you to identify if these or other options are most appropriate for the accomplishment of your estate planning goals.


Do Virginia Executors Get Paid?

The role of serving as a Virginia executor or sometimes referred to in other states as the personal representative of an estate can require a lot of work. Per Virginia code section 64.2-1208, the commissioner of accounts allows for a personal representative to be reimbursed for any reasonable expenses incurred and, unless a separate agreement of the court or the will provides, reasonable compensation for their services provided in estate administration.

The will can include a specific method for calculating the fees paid out to this person, such as a percentage or a specific amount. This means that usually the commission stated in the will is allowed unless it is excessive.

Many court cases have considered the issue of what is considered reasonable for executor payment in VA. A general rule in many jurisdictions that has been followed is that 5% of the value of the assets inside the estate can be considered reasonable.

However, the circumstances at hand might call for extraordinary services meaning that this figure could be increased. It is also important to realize that it can be decreased. A personal representative in Virginia should maintain original receipts for all expenses that they have incurred and keep a record of all time extended and any tasks performed for the estate.

If the person fails to file certain required statements with the commissioner of accounts per Virginia Code section 64.2-1217, the personal representative can forfeit their right to compensation. There is no doubt that you may have many questions about what this process entails and it is a good idea to consult with a Virginia estate planning lawyer sooner rather than later.



Four Ways to Simplify or Avoid Probate

Given that probate can be expensive as well as a drawn out process, it’s no surprise that many people turn to estate planning strategies to avoid or simplify probate. Although in many cases probate can be streamlined, it might be best to think about strategies to avoid probate where you can.

There are several different strategies to do this and you might be able to accomplish additional estate planning goals by working directly with an estate planning lawyer in your immediate area.

The first way to address probate is to transfer property to a trust instead. This involves the creation of a trust document and the funding of that property into the trust. The second way to avoid probate is to use payable on death registrations, which are associated with any transfer on death accounts.

Most banks, savings and loans, brokerage firms, and credit unions will give you the ability to name a beneficiary for this. Another way to remove assets from your taxable or probate estate is to make tax free gifts. In 2021, for example, you are eligible to give your heirs up to $15,000 per person every year without a gift tax penalty.

Finally, there are many assets that automatically pass outside of the probate process. These are typically those associated with beneficiary designation forms, such as retirement accounts and annuity contracts, and life insurance policies. For more information about how to avoid probate with your own estate, speak with a lawyer who has extensive experience in this field.

Need help with Virginia Beach estate planning? Now is a great time to schedule a call.

What If I Don’t Want to Be the Executor of Someone Else’s Estate?

Being appointed as an executor comes with a significant set of responsibilities and a high level of ethics that call upon you to carry out important tasks with a focus on details and the law. The support of an experienced estate planning professional is recommended when naming an executor or personal representative to your own estate.

Choosing someone else to serve in this role might initially seem easy, as you likely have a friend or family member who could potentially take on this responsibility. However, it is important to recognize that the executor you choose does not have to accept this position so you may want to have a conversation beforehand about what this entails and what they need to know before making a decision about whether or not it is right for them.

No one is mandated to take on the responsibility of serving as an executor and it might not be right for everyone either. If you have already been appointed as an executor of a loved one’s estate, you do not have to allow the court to appoint you to this role and can instead decline the responsibility.

In the event that the deceased party names a backup executor, the backup executor will then step into the role to carry the will through the probate process. In the event that there was no last will and testament, or the last will and testament did not name a backup executor, it becomes the responsibility of the court to appoint a personal representative.

As an executor, it is important to recognize that some of the key tasks you would need to take on include filing the paperwork for probate with the court, providing notice to interested parties, such as beneficiaries or creditors, handling any tax issues, and inventorying and distributing the assets of the deceased. Since this can be a significant responsibility, make sure that you decide whether or not it is the right fit for the person you have chosen.

Study Shows Americans Look at Trusts, Wills and Life Insurance In 2020

There are always good reasons to update an estate plan, such as big changes in laws impacting estate and gift taxes or changes in your personal life that warrant new beneficiaries. But world events or family events might also prompt you to rethink your strategies.

As the coronavirus pandemic has made the topic of death unavoidable, more people than ever stepped back to look at their existing estate plans or to craft strategies to close those gaps.

According to the MIB Group, the number of life insurance applications for people younger than age 44 increased by over 7% in 2020 despite the fact that applications for life insurance had been down in the previous years. The creation of key estate planning documents, such as a will were also up due to covid-19. One study recently completed by LegalZoom.com found that over 30% of people between the ages of 18 and 34 created wills directly as a result of the pandemic and its unexpected impacts.

Preparing for death can be difficult and an uncomfortable topic to discuss with your loved ones but it can also be especially important to have these conversations well in advance of a crisis.

If you need support crafting your estate planning documents or discussing whether or not your existing strategies help to accomplish your individual goals, it’s a good idea to have an existing relationship with an estate planning law firm in Virginia Beach that can help serve as an important resource for you during these times.