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Month: March 2023

Don’t Make These 5 Mistakes in Your Estate Plan

When it comes to your estate plan, procrastination, outdated documents, forgetting end-of-life care, and tax implications can cost you (and your loved ones). 

If you think there’s always tomorrow to put together an estate plan, this could cost you and your loved ones in a big way. While many put off estate planning because they think they’re too young, don’t own enough assets, can always “worry about it later,” or think they can’t afford to pay a qualified professional to put an estate plan together for them, not protecting your interests, assets, and loved ones in the event you pass away can wreak havoc on your family long after you’re gone. 

Here are some of the most common mistakes people make when formulating their estate plans. You may want to learn from their mistakes. 

Don’t Make These Mistakes in Your Estate Plan 

  1. Procrastination. Easily the biggest estate planning pitfall of all is procrastinating on putting together your estate plan. A common misconception is only elderly people need wills, but the truth is, we never know what a day could bring forth and ensuring your loved ones are protected should be top of mind. Not having an estate plan in place can lead to a stressful, costly, and lengthy probate process for your family members where a judge who doesn’t know you from Adam has the authority to decide what happens to your assets or minor children. While considering your own death is not an enjoyable experience, getting your estate plan solidified with a qualified professional can ease your mind, protect your assets, and ensure your loved ones are protected. Don’t wait.
  2. Going the DIY route with your estate plan. You may be able to sidestep attorney fees by printing a DIY will from sites like LegalZoom, but you may also want to consider the ramifications of a Google estate plan versus working with a qualified professional. Going the DIY route may save you money now, but your loved ones may suffer emotionally and financially if the documentation is not ironclad or doesn’t hold up in court. Worse, DIY estate plans and living wills are often subject to scrutiny or claims of invalidity.
  3. Outdated documents. Another misconception in estate planning is that the process is a one-and-done. However, your estate plan may require updating several times throughout your life; for example, getting married, divorced, remarried, or purchasing new property are all reasons to revisit your estate plan and make necessary changes. Thus, it is critical to keep your documents up to date and revisit your estate plan as often as needed.
  4. Making children joint owners of your assets. While it may be tempting to make your children joint owners of your assets, the implications of doing this may give you pause. Making children joint owners of your assets gives their creditors access to your investments. And while you may have the most responsible and financially literate children in the world, the future is unpredictable. They could have a business unexpectedly go under or in a costly vehicle accident. For a bulletproof estate plan, it is recommended to instead name your child as a power of attorney and as a payable-on-death beneficiary to your bank or brokerage accounts.
  5. Failing to plan for end-of-life care. Many people equate estate planning with leaving assets to an heir, forgetting that end-of-life preferences are a critical piece of every estate plan. Failing to plan for end-of-life care and outlining your final wishes should you become unable to express your wishes yourself can mean leaving these important decisions in the hands of your loved ones or the court. Verbally expressing your wishes to your loved ones is important, too, but if the information is not outlined in an advance medical directive, you have no way of knowing your preferences will be carried out. Thus, including an advance medical directive in your estate plan can create clarity around your end-of-life healthcare preferences and decisions.

Mobile Estate Planning Made Easy

The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.

Serving the Greater Richmond area and beyond, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.

What is an Advance Medical Directive?

Including an Advance Medical Directive in your estate plan will ensure your loved ones enforce the medical care you do and do not want.

Do your loved ones know what life-prolonging care you do or do not want in the event you are incapacitated and unable to communicate your wishes on your own? 

An estate plan carefully outlines your final wishes and covers a variety of other personal matters. Among the things typically included in an estate plan are deciding who inherits your assets, deciding who will care for your minor children or any pets, and your preferences for end-of-life care. An Advance Directive takes care of the latter. 

What exactly is an Advance Medical Directive? Why is an Advance Directive important? Here is everything you need to know about Advance Medical Directives and how to include yours in your estate plan. 

How do Advanced Medical Directives work? 

An advance directive is a document that outlines your wishes regarding medical care in writing. Many erroneously assume their loved ones know and will enforce their wishes, and while you can certainly express your wishes orally, without an Advance Directive in place, there may be more confusion than clarity. 

In short, an Advance Medical Directive is a way to consent or refuse medical interventions in specific clinical situations and is longstanding even in the event you experience severe or irreparable cognitive impairment. 

In other words, this critical document outlines your medical preferences in the event you are not able to communicate them on your own. 

The Two Types of Advance Medical Directives in Virginia

In Virginia, there are two types of advance directives. These include:

Appointment of an Agent

You may appoint another person, such as a spouse, child, or friend, to be your “agent” or “proxy” to make decisions for you if you become incapacitated or are unable to provide informed consent for health care decisions independently. You can also specifically tell your agent what kinds of care you do and do not want. This is also called a medical Power of Attorney (POA) or “Power of Attorney for Health.” 

Living will

You may also state which life-prolonging treatment(s) you want or do not want (such as a DNR or Do-Not-Resuscitate) if you are diagnosed as having a terminal condition and are unable to express your own wishes. This is called a living will

Benefits of Including an Advance Medical Directive in Your Estate Plan

An estate plan is an all-encompassing compilation of your final wishes. Including an Advance Medical Directive in your estate plan can lighten the load on your children or other loved ones who are caring for you or coordinating funeral arrangements. Since it will already be a stressful and trying time for those who love you most, being proactive in your designations for end-of-life care can make things easier on everyone, including you. The benefits of including an advance medical directive are:

  • Documenting your preferences for end-of-life or life-prolonging care can circumvent awkward or uncomfortable conversations with family members who are caring for you. 
  • Remove any guesswork or undue burdens on your loved ones when deciding what healthcare measures to take should you become incapacitated or terminal.
  • Create clarity and understanding about your final wishes so everyone in your family and healthcare professionals are all on the same page about your care.
  • Ensure your final wishes for end-of-life care are carried out.

Do I need an advanced medical directive if I am young and healthy?

Not to be the bearer of bad news, but it isn’t only the elderly who experience death. Since you never know what tomorrow may bring, it’s important to consider that you might need someone to make medical decisions for you in the event you suffer a serious injury or develop a terminal illness. Thus, having an advance medical directive in place along with verbally sharing your wishes with the person you appoint can keep your stress at bay if you are prone to consider the “what-ifs” in these situations.

Can I appoint more than one person as my medical power of attorney? 

Can you? Yes. Should you? No. While you can certainly communicate your wishes to all of your children, for example, appointing more than one person on your medical directive can cause conflict, and confusion, and make these important decisions harder for everyone involved. And don’t worry—your agent or proxy can only make these decisions for you should another doctor or licensed clinical psychologist determine you are unable to make decisions for yourself. And if you are only temporarily unable to decide for yourself, the authority returns to you when you regain capacity.

Mobile Estate Planning Made Easy

The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.

Serving the Greater Richmond area and beyond, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.

Disclaimer: This material is intended for general information purposes only and does not constitute legal advice.  Responses to inquiries, whether by email, telephone, or other means, do not constitute legal advice, nor do they create or imply the existence of an attorney-client relationship.

4 Ways to Gift Your Home to Your Children in Your Estate Plan 

Transferring ownership of property from parent to child can have tax implications. Here’s what you need to know when making your estate plan. 

Having assets to leave behind to your children when you are gone is one of the greatest feelings. Your home, where you likely made many lasting memories with those you love most, has been one of your most valuable investments before and during retirement, so knowing it will be left in good hands will give you peace of mind. 

However, there are a few things to consider when it comes to including your property in your will. Transferring title to real estate can have a lot of perks during the lifetime of the owner, but it also comes with some potential implications you should consider before signing the deed over. Here’s what you need to know when gifting your home to your children in your estate plan.

Gifting Real Estate to Children: What You Should Know

There are several different types of taxes you and your heirs should be familiar with when it comes to inheriting real estate. Here is a brief overview:

  • Capital gains tax – the levy on profit that your children make should they sell the inherited property 
  • Estate tax (or death tax) – taxes levied on the transfer or property at death
  • Inheritance tax –  a levy on assets inherited from a deceased person
  • Gift tax – a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return
  • State and federal estate tax – an additional tax on property including cash, real estate, stock, and other assets transferred from deceased persons to their heirs

Similarly to state estate tax, both federal and state estate tax are assessed on the estate’s fair market value (FMV), rather than what the deceased originally paid. With these taxes in mind, here are four ways to gift your home to your children in your estate plan.

How to Gift Your Home to Your Children in Your Estate Plan

  1. Sell your home to your children. Many parents opt for selling their property to children, but fair warning: the home must be sold at fair market value. If you try to sell your home to your children for a bargain, this could be considered a gift and you may incur tax implications.
  2. Gift your home to your children. If you want to give your home to your children during your lifetime, an irrevocable trust might be your best bet. The pros: Your home will be protected in the event your children’s creditors come knocking. The cons: The property could be foreclosed and taken from the family in the future if the child gets into financial trouble.
  3. Bequeath your home to your children. Bequeathing property means giving personal property via a will, where personal property owned by the decedent (or the deceased) at the time of death is disposed of as a gift. Bequeathing has typically been used to give personal property. When going this route, it is recommended to do so through a revocable living trust where you can name your children as successor trustees for continuity of property management. As an added safeguard, you will be able to make changes should circumstances or decisions change along the way.
  4. Transfer the deed to your children. Virginia is one of 25 states that allow property owners to sign a Transfer-on-Death deed. This can be used to avoid probate on the property. This can be one of the easiest and most cost-effective ways to ensure you have full oversight over who inherits your property.

Mobile Estate Planning Made Easy

The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.

Serving the Greater Richmond area and beyond, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.

FAQs

  1. Can I Gift My Real Estate Property to My Child as Part of My Estate Planning?
    Yes, you can include your real estate property as part of your estate planning by gifting it to your child. However, it’s crucial to be aware of potential tax implications and legal considerations.
  2. What’s the Best Way to Gift a House to My Child While Avoiding Tax Implications?

The best way to gift a house to your child while minimizing tax consequences often depends on your specific circumstances. Some options include selling the property at fair market value, using an irrevocable trust, or utilizing Transfer-on-Death deeds. Consulting with a legal or financial advisor is advisable to determine the most suitable approach.

  1. Is It Possible to Give My Home to My Child as an Asset Transfer in My Estate Plan?

Yes, it’s possible to transfer your home as an asset to your child as part of your estate plan. This can be done through various methods, such as gifting, bequeathing, or using Transfer-on-Death deeds. Each method has its advantages and considerations, so it’s important to choose the one that aligns with your goals and circumstances.

  1. How Can I Ensure That My Children Inherit My Property Without Going Through Probate?

To ensure that your children inherit your property without going through probate, you can explore options like the Transfer-on-Death deed, which allows the property to pass directly to your beneficiaries upon your passing. This can be a relatively straightforward and cost-effective way to avoid probate for real estate assets.

  1. What Are the Key Considerations When Gifting Real Estate to Family Members?

When gifting real estate to family members, several key considerations come into play. These include the fair market value of the property, potential tax implications (such as gift tax), the financial stability of the recipients, and the use of legal tools like trusts to protect the property’s ownership. Consulting with professionals well-versed in estate planning and real estate law like Assurest can help you navigate these considerations effectively.

Disclaimer: This material is intended for general information purposes only and does not constitute legal advice.  Responses to inquiries, whether by email, telephone, or other means, do not constitute legal advice, nor do they create or imply the existence of an attorney-client relationship.