Read this list of FAQ that married couples should be thinking about when it comes to estate planning.

Estate planning is an important step for any individual, but it becomes even more important when family is involved. Married couples can take a big step in planning for their family’s future by setting up an estate plan, but planning for two isn’t always as easy as planning for one and one. Here are a few common questions married couples may have when planning or maintaining their estates.

Should we have joint representation?

Joint representation for estate planning is sometimes a more complicated issue than it seems. Even as couples are joined in sickness and in health, they are sometimes not on the same page in terms of estate planning, especially when it comes to second marriages or couples with children from previous relationships.

When considering the best route for estate planning, it’s important to remember that separate planning is sometimes simply the best plan of action for a couple’s finances. In some cases, such as when couples are married later in life or have major differences in previous wealth or ideas on how to disperse property, separate representation probably makes sense.

Joint representation is typically best suited for long-term couples without previous spouses or children. Working with one lawyer on estate issues can help communication in planning for the future, and it is also more financially efficient than using separate lawyers. It also makes it easier to distribute assets in a concerted way, because the same attorney is working with all of the available assets.

Estate planning can be a divisive issue for some families, so it is important to make pragmatic decisions regarding how your planning will be handled. Joint or separate representation does not have to be divisive in itself; rather, each can have benefits or drawbacks, so it’s important to discuss which option will be better for your situation.

How does my spouse factor into my will?

Your spouse’s role in your will is typically designated as clearly as anybody else’s, with some exceptions. In general, you should designate your property to your spouse just as you would designate it to anyone, although not all property has to pass through a will. Jointly owned real estate, bank accounts, and securities automatically pass to the surviving spouse. If you would like your spouse to benefit from life insurance or retirement plans, you should designate them as the beneficiary, as those assets pass automatically as well. Property remainders also frequently pass to spouses through residuary clauses.

Spouses typically have a larger impact on revocable estate plans, which are a major part of many estate plans and help minimize estate tax costs during property dispersal. Most trusts distribute property in a way that is optimal for low estate tax costs, factoring in state taxes (which Virginia currently erases through credits) and federal taxes (which can change frequently). Certain trust structures also determine how your spouse receives payments.

Are there estate tax benefits to being married?

The federal estate tax applies only to fairly large estates, with the exemption set at $5.25 million. If the total amount falls below that, estate taxes are not a concern.

For estates larger than that, recent laws have changed the tax implications for transferring property. In the past, spouses had access to exemptions of a certain amount, in addition to being able to transfer unlimited amounts to their spouses in life and after death. However, the unused exemptions could not be transferred to the other spouse after death, meaning that property would have to go into a family trust or the amount above the exemption would be taxed after the second spouse’s death. Under the American Taxpayer Relief Tax Act of 2012 (ATRA), spouses can now transfer their exemptions, meaning that the surviving spouse can take advantage of all of the unused exemption.

If you would like to get help with your estate planning, Virginia residents can contact our law firm located in Vienna, VA to schedule a consultation.

Start the New Year off right by updating your critical estate planning documents. Find out what you should be looking at.

Most of us use the New Year to get started on something we should have done a long time ago: Start exercising. Eat right. Floss every day. Live every week like it’s the last week of our lives.

But it can also be a good time to keep up-to-date on the important things that we’ve already started. Brushing up on and reviewing your estate planning each January can be a smart move because it helps you remind yourself what you have designated in your will and the rest of your estate, and it allows you to make some necessary changes regularly to avoid inaccuracies in case something happens.

Review Your Designations and Appointees

A year is a long time in anyone’s life, and major changes can happen. It’s important to keep your estate up-to-date in accordance with your life now as opposed to your life when you started planning your estate.

Your will is the most basic component of your estate, and reviewing the designations indicated in your will can help you account for possible changes in your or family’s lives. You may wish to account for new children or recent deaths in the family, or you may decide to restructure some of your bequests (such as deciding whether or not a trust is necessary).

It’s also important to review the appointees indicated by your estate so that you can be sure that each person is still able to fulfill the responsibility that you originally designated for them. It’s important to take into consideration the responsibilities of your executor, trustee, and any guardians when applicable, as well as the people who will have durable power of attorney and serve as your health-care proxy. The people filling these important roles for you after death can change from time to time, so it is important to make sure that your choices reflect your current desires.

Consider Changes in Your Bequests

Just like changes in your life can affect your choices of people designated as beneficiaries in your will and appointed to fill various roles for your estate, such changes can affect the estate itself. If you have incurred larger-than-normal costs or added additional property to your estate, it makes sense to review it regularly to make sure you are assigning the right property to the right people.

In terms of probate property, you may wish to reallocate certain properties to different beneficiaries according to how much property is available. If you previously indicated smaller amounts to a few people (such as children) but recently came into a large sum of money, you will want to stay current with who is given what. Non-probate properties like insurance proceeds are also important to keep up-to-date.

It’s also important to take your non-material properties into consideration. Digital assets can cause confusion if no arrangements are made for them ahead of time, so reviewing your online presence every now and then can help you provide accurate instructions to your family. Be sure to make a list of all of your online accounts with their passwords, particularly those with automatic billing. With more and more important content being saved on sites like Facebook and Flickr, it’s important to make sure you are up-to-date on which accounts you operate and whom you would like to have access to them.

From a logistical standpoint, reviewing your estate can also help deal with estate tax law changes. Estate tax thresholds have decreased in recent years, making the transfer of large amounts of property to certain heirs more expensive, so you may decide to rearrange some of your bequests to avoid incurring additional costs for your heirs. You may also decide to restructure your estate to include trusts to avoid your property going through probate court.

The attorneys at Flanders and Wade are located in Vienna, VA and offer comprehensive estate planning services for Virginia residents.  If you want to find out more about our affordable estate planning packages click here.

The most effective way to optimize the transfer all of your personal and real assets to your heirs upon your passing is to plan for the event before the moment arrives. Because of tax laws, it is never possible to completely avoid the probate process even if your estate, through proper estate planning, will be distributed acccording to the terms of a Last Will and Testament.

However, with the right instruments it is quite possible to diminish or at least limit the amount of time an estate is required to spend in probate court. Reduced time in probate court also reduces the taxes and fees typically associated with the entire probate process.

Developing Trusts and Estate Planning in Northern Virginia

Formulating a good estate plan can assist a client in their ability to control their personal and real assets and provide care for family members suffering from a disability.

Offering proactive counsel and advice, a competent estate planning attorney will use all available instruments to help their client including building:

• Last Will and Testament
• Revocable Living Trusts
• Irrevocable Life Insurance Trust
• Charitable Remainders
• Qualified Personal Residence Trusts
• Special Needs Trusts
• Specific trust for minor children
• A variety of other trusts

Trust and Estate Administration

With a properly developed living trust, initial formal probate proceedings are not always necessary. Families with limited assets are often able to settle the estate to the minor children or surviving spouse in a quick and proficient manner. This process often sidesteps any delays and most expenses associated with the estate administration costs typically involved in larger estates.

Whenever formal probate is required, competent attorneys that employ their resources and skills will assist fiduciaries and clients in the decision-making process, offering extensive services that include:

• Attendance and participation in all probate court proceedings
• Consultation with real estate agents and tax advisors
• Identify creditors with claims that need to be paid or disputed
• Manage the process of final distribution of all the estate’s assets

Tax planning, estate planning and financially planning are often easily confused, and sometimes considered to be one and the same thing. They are not at all similar to one another, and each are worthy of their own considerations.

Who Can Provide These Services?

To begin with, estate planning is performed by an attorney, while financial planning is often performed by financial professionals, accountants, advisers and bankers. Tax planning usually involves a tax professional, accountant or CPA. By combining all three together, beneficiaries can maximize the amount of money they receive through an inheritance from an estate.

Financial Planning

Financial planning often involves a variety of investment instruments including bonds, stocks, futures and mutual funds. Developing a solid financial plan will provide you the monies and assets you will require once you retire.

Estate Planning

Estate planning is about legal documents that include wills, living trusts, irrevocable trusts, health care proxies, special needs trusts, powers of attorney and other valuable instruments.

The reason to develop an effective estate plan concerns three primary objectives that include:

• Deciding who controls all your valuable assets both tangible and intangible
• Determining who will enjoy all the benefits of the assets while you are still alive in good health, and who will enjoy them once you have passed on
• Formulating a plan to specify how your assets will be distributed upon your death

A well-designed estate plan is based on who controls your assets and when they will control them. Intricate estate planning will consider most outcomes after your death that includes spouses that remarry, or become incapacitated, along with the dynamics of children that become divorced or file for bankruptcy. It also determines who remains in control and receives benefits of the assets you have worked hard to achieve.

Tax Planning

Tax planning is an essential tool used to minimize any tax levied on the inherited portion of an estate to its beneficiary, and to maximize inheritance. Tax planning takes into account all the exemptions legally allowed at the local, state and federal level.

Tax planning, financial planning and estate planning can significantly impact one another. By proper planning of all three aspects together, an estate owner can always maintain full control of their assets during their lifetime and beyond.