Can You Modify a Revocable Living Trust?

April 30th, 2012

A revocable living trust, or RLT, is one of the most powerful tools available today for estate planning professionals. When properly used, a living trust can help you avoid probate as well as reduce or eliminate estate taxes by allowing you to separate your assets from your personal estate ahead of time.

Technically, a RLT takes your property and transfers it to another party (the trust) for the benefit of a third party (your heirs). The trustee holds legal titles and your heirs hold equitable titles in the property. The trustee has a fiduciary responsibility to the heirs.

The rules governing trusts are set down when the trust is created. What happens, however, if you change your mind about details of the trust? Is it too late to make changes? Let’s find out.

Revocable or Irrevocable Trust?

When you first set up your trust, you stated clearly that it was revocable or irrevocable. You also stated, if it is revocable, how it can be revoked or amended (modified). Depending on the state, a living trust is revocable unless stated otherwise. In other states, however, it is just the opposite.

An irrevocable living trust usually cannot be modified or revoked.

A revocable living trust can be amended in some states unless the settlor (the person who established the trust) provided otherwise. You should expressly set forth how to revoke or amend or modify a trust if you wish that to be an option.

Virginia has codified requirements to modify or amend a revocable trust and you should consult an attorney for help in meeting these requirements.

Common Methods to Modify a Trust

Those methods include requiring:

  • The amendment or revocation must be in writing
  • The settlor’s signature must be notarized or witnessed
  • The trustee consents to the changes

For a Non-Amendable Trust

There are ways to change a non-amendable trust:

  • Revoke the original trust and have the assets transferred to the settlor
  • Then create a new trust with provisions to make it amendable

You, as the settlor, must retain the right to revoke the trust.

Sometimes a trust will terminate and at that time you can create a new trust that contains the provisions you wish. Some reasons may include a termination date or the death of a beneficiary. Sometimes state law allows for the early termination of an irrevocable trust, at which time you can create a new trust with the terms you wish.

If you are looking for a law firm in Northern Virginia that can help you make decisions about avoiding probate, contact Virginia Attorneys Flanders and Wade.

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7 Benefits of a Living Will

April 20th, 2012

A living will , also be known as an advance health care directive , have become popular as more and more people realize the importance of making critical decisions about their medical and end of life care ahead of time. Many protracted legal battles have been played out in the media about how long (and at what expense) to keep family members alive using medical treatments – and a living will helps prevent much of this by allowing each person to document their own wishes and preferences.

Seven Benefits of a Living Will

There are several benefits in creating and implementing a living will. Those include:

  1. You can refuse treatment that you do not want
  2. You will know the outcomes of your medical treatment
  3. You can prevent arguments among family members
  4. Make decisions easy for your family
  5. Ensure doctors follow your wishes
  6. Authorize treatments you may want
  7. Eliminate financial problems for your family

Benefit #1 – Refuse treatments that you do not want: There are a number of reasons why people may not want certain medical treatments. It could be a “do not resuscitate” order, or you may not want a feeding tube. Some treatments may be against your moral or religious beliefs. A living will gives you control over the treatments that you will accept and those you will not.

Benefit #2 – Know your outcomes. You never know when an illness or disease might strike or you may be in an accident that puts you into a situation where you cannot make your health care decisions. Having a living will in place assures you that incapacitation will not make outcomes a guessing game. You know what to expect because you have specified it.

Benefit #3 – Prevent arguments among family members. Your family cares about you, but different family members may have different opinions about the best treatment for you. By creating a living will, you can eliminate any disagreements.

Benefit #4 – Make the decisions easy for your family. Since you have specified what you want, it will be easier for your family to accede to your wishes. You have limited their options so decisions won’t be as difficult as they might have been.

Benefit #5 – Ensure doctors follow your wishes. With an advance directive, your doctors will do what you wanted them to do. They won’t do what they simply feel is best for you. You are in control and not your doctor.

Benefit #6 – Authorize treatments. There are many procedures that require authorization from the patient. You can make these authorizations in advance in case you are incapacitated. You can insure that you will get the treatment you need and want.

Benefit #7 – Eliminate financial problems for your family. Medical treatments, especially long term care, can become very expensive. You can make decisions in advance that will eliminate or minimize the cost of care for you.

If you need help deciding on just the right solution for your long term medical concerns, consult Virginia Estate Planning Attorneys Flanders and Wade –Attorneys at Law

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Important Considerations When Drafting an Advance Medical Directive

April 4th, 2012

An advance medical directive is part of a family of directives with different names, including a living will, all with similar goals. The goal is to give you control over your advance medical decisions during times when you may not be able to make them for yourself.

Advance directives came about as a result of issues related to patients undergoing medical treatments and procedures that perhaps were unwanted in an effort to preserve life. These directives allow each individual to specify what their wishes are and how they will be carried out. And ultimately, having these wishes documented relieves a great deal of stress both from family members and physicians as the medical decisions can be made in advance by the patient themselves.

Benefits of an Advance Medical Directive

There are several benefits to creating an advance medical directive and some precautions to take. These include:

  • You can make decisions in advance
  • The directive will speak for you
  • You can update your directive anytime

Decisions in Advance: When you are able to make your decisions in advance it is a big plus, but you must consider carefully just what those decisions are to take advantage of that plus. You can make sure that your family members do not undergo the strain of making key decisions during a stressful time. You make your decisions and they are clearly spelled out.

The Directive Speaks for You: The directive does not take effect until you cannot speak for yourself, so again you must plan carefully about what you want your directive to say when it takes your place as your spokesman. As long as you are competent, you will make your own decisions. When you are not, your advance medical directive will guide decisions used in your treatment.

You Can Update Your Directive: Nothing is set in stone forever in your directive. If your situation or personal beliefs change, you can change the details and your wishes in the directive. However, advance medical directives are legally binding and must be updated if you change your mind about some part of your future medical treatment.

Your Doctors or Family Members May Disagree: There is little you can do to prevent your family members from trying to subvert your advance medical directive if they disagree. They can appeal to your doctor or to the hospital. Also in certain cases your healthcare providers may decline to honor your directives at their discretion such as during a surgery. This situation is something you should discuss in detail with an attorney before making your decisions.To avoid missteps in completing an advance medical directive, it is best to consult legal counsel. If you are looking for an estate planning law firm in Northern Virginia that can help you make decisions about an advance medical directive, contact Flanders and Wade – Attorneys at Law.

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The Basics of guardianships and trusts

December 19th, 2011

Understanding guardianships is critical to anyone who is planning for the life of their child or dependents after they are gone. And while no one likes to think about what will happen then, planning now can help you to avoid any potential risks your loved ones may have to deal with later on.

Understanding Guardianships

A guardianship is a court supervised proceeding in which those who are minors or those who are adults unable to make their own decisions are considered for placement with friends or family if their current guardian or parent dies. The guardian is court appointed, which means that the guardian is appointed without any input from parents, usually because the parents left behind no specific instructions for what should happen in their absence.

In a guardianship, the guardian will manage the assets and well-being of the minor or dependent children. This process is far more complex than other methods available, though. For example:

  • A guardianship requires annual accountings of the assets of the dependents
  • Limitations on decision making to some level occur
  • Bond requirements are often in place
  • Restrictions on how money can be spent or invested for the benefit of the dependent are in place
  • More lawyer and court involvement in the lives of the minor or dependents is common.

There are ways to avoid this from occurring though, and that is something many parents are striving to do. If there is no trustworthy person that is available to take care of your children then a guardianship may be the best option for your child, but with activities and assets monitored and under court control, this is not the right option for many.

How Trusts Offer Protection

One of the best ways to avoid the effects of a guardianship is to develop a trust before you die, so that you have the last say in what happens with your children should you be unable to care for them. There are several factors to consider:

  • In a typical trust for adult children, it allows for the assets you have to move to your children without any risk of the court limiting access. A living trust, the child manages his or her assets without any guardian control.
  • For minors or dependent children, a testamentary trust can be helpful. This allows you to leave assets to a minor child with a trustee to oversee the trust.

For those who wish to control what happens to their children and dependents after their death, using a trust is often the best route to go. You can leave assets and overall guardianship guidelines behind as part of your will and estate plan. These, when created properly, can protect your loved ones and ensure that they are able to benefit from your estate without the risk of the court becoming involved in their lives. For many parents, knowing their child is protected, long term, is the best route to take to avoid problems down the road should something happen.

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Is Elder Law the same as Estate Planning?

December 5th, 2011

It’s a common question we get – is elder law the same thing as estate planning?  The simple answer is no.  Elder law tends to deal more with the specific end of life issues faced by the elderly, while estate planning is a bit more holistic in scope.  However, some of the issues addressed in elder law are often addressed with good estate planning so the two may sometimes overlap.

Given these differences, should you hire an elder law attorney or should you hire one that focuses on estate planning? It depends on your circumstances.  Both are good options to consider and are far better choices than choosing to do it on your own. Understanding the differences can help, but one thing to keep in mind is that most of these professionals can help you to construct the type of document you need to accomplish your goals.

A closer look at elder law

Perhaps the most important thing to know is that in elder law planning, the goal is to plan for your life’s needs prior to death. This means providing for your medical needs, your living expenses and even long-term health care. While estate planning does this as well, it also focuses on your estate after your death, giving you more opportunities to achieve what you hope to before and after your death.

Often, elder law focuses primarily on the prior to death laws. This may include providing you with help and guidance for things like:

  • Nursing facility care
  • Care if you become disabled or incapacitated
  • Care including conservatorships and guardianships
  • Disability planning resources

In short, with elder law you are planning for those years prior to your death, in case something happens that leaves you unable to make decisions yourself or when you need help to ensure your wishes are carried out when you cannot state what those wishes are.

Differences with estate planning

Estate planning attorneys can help with the creation of plans prior to death as well, especially in terms of planning for the monetary aspects of these needs. When you are working with an estate planning attorney, though, you are often going to focus specifically on your goals for long-term estate planning. Not only will this plan help to provide for your needs up until your death, but also after your death as well. It is often more of a comprehensive plan for all of your needs.   Estate planning may also include things like trusts and guardianships as well as advanced medical directives which help address these other important issues.

Elder law or estate planning, the decision is up to you based on what your goals are. However, most parties can meet all of your goals overall, not just one or the other. Take the time to consider what you need and want from your estate plan. Contact a professional to help you to make it happen and get it in place. It is never too late to make key decisions that will affect your life and your heirs.

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An Overview of the Types of Wills

November 22nd, 2011

Planning your will is one of the best things you can do for your estate, as well as for your heirs. The question is what is the first step? Before you can make decisions regarding the creation of a will, it is critical to understand what your options are. Numerous types of wills accommodate most desires and wishes within the letter of the law specific to your state.

In short, all wills are documents that legally outline your goals for your estate. There are various ways to make those wishes take place.

  • A Simple Will covers basic needs. This includes the distribution of assets, and is often preferable for those with limited assets and smaller estates.
  • A Guardianship and Trust is a document outlining your goals for your children, including those children who are minors, or those who are disabled and unable to care for themselves. This document will specify your instructions in terms of who will take guardianship of the children, as well as who will manage the children’s estate after your death. This includes all funds and assets you plan to leave to your child after your death.
  • Revocable Living Trusts are another type of will planning tool. This will allow you to create assets that pass on to your heirs according to your wishes, but that do so by avoiding probate court. If you wish to leave money or assets to family, friends or charities, this is a good way of reducing tax implications on the funds. You can also change these trusts throughout your lifetime, as you need to.
  • Pourover Wills are yet another type of will. It compliments a revocable living trust by addressing any assets that are not included in the trust. It works to transfer those assets into the trust at the time of your death.

Selecting the right type of will is a complex process. Because of taxes and legal requirements that do change frequently, it is up to you to choose the right will for your goals and based on the size and type of estate you have. It is always a good idea to work with a trusted attorney for this process since the attorney ensures the will is legally binding and fills all necessary requirements. If a will is not valid, anything you planned for will not occur. To ensure this does not happen, plan to create the right type of will for you with an estate planning attorney.

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