One of the most common questions my clients ask is where they should keep their estate planning documents. After spending time and money creating an estate plan, it is important to put the documents in a location that is safe, secure, and easy to find.
For our July issue of Two Certain Things, our summer associate Patrick Macaluso, has prepared a brief explaining how a recent law change in Virginia protects beneficiaries of Life Insurance from the creditors of a decedent's estate.
Many charitably inclined people like the idea of creating their own foundation---an organization created by them to further the charities and causes they hold dear far beyond their lives.
Donor Advised Funds are convenient, flexible tools for individuals, families, businesses, or groups that want to be personally involved in suggesting grant awards made possible by their gifts.
I don't want to control my children from the grave! I often hear the sentiment above exclaimed from prospective clients during an initial meeting. Typically, they are concerned that completing an estate plan equates to the post-mortem application of overly burdensome controls on their loved ones.
Over the last few months a political battle has raged between presidential contenders hopeful to be our 45th president. One of the key points of contention between the candidates has been their varying approaches to Estate and Income Tax Reform.
Many parents—particularly young parents—do not consider estate planning a high priority. Some want to wait until they are more established, and others simply never think about estate planning at all; however, there are several reasons why all parents with minor children should seriously consider creating an estate plan to protect their family and their savings.
With spring time right around the corner, many high school seniors are going to be entering the last round of planning for their new college careers. Our latest newsletter addresses many of the appropriate legal steps you can take to help be ahead of the curve.
January 2016 - No-Contest Clauses in Trusts and Wills
A “no-contest clause,” also called a forfeiture clause, can discourage beneficiaries from challenging the validity of a will or trust. While such clauses can effectively deter contests, they are also limited in their power; this newsletter discusses the benefits and limits of a no-contest clause.
December 2015 - Year End Round Up
We are again tying up loose ends as 2015 comes to a close. This year has shown us a new Williamsburg office, new faces in the office, and many new clients-turned-friends. The theme for this month’s newsletter is your “End of Year Planning Checklist.” Please also note that enrollment for our TrustGuard™ annual review program will be open through February 2016- see the note at the end of this Newsletter. Happy Holidays to all!
November 2015 - Why Are My Estate Planning Documents So Long?
Before I went to law school, my mom got a trust from a local attorney in Michigan. The attorney, who was not an estate planner, used a short form that my mom thought would meet her needs—after all, her intentions were simple, so shouldn’t her trust be simple?
October 2015 - Should I consider a Professional Executor?
Choosing an executor, or a personal representative, requires greater consideration than most people realize. Often, people appoint their spouses or adult children because they feel that the spouse or child will have that person’s best interests in mind. While this may be true, relationship should not be the only factor a person considers when writing a last will and testament. The role of executor carries with it a great deal of responsibilities that demand a significant amount of time, as well as knowledge of financial issues and the probate process. Sometimes, a professional executor, like a bank or an attorney, is better suited to administer the estate than a spouse, a child, or even a close friend. Thus, appointing an executor requires a careful consideration of the complexity of the estate and the abilities of the potential executor to navigate both interpersonal and financial issues.
September 2015 - WHEN SHOULD I MEET WITH MY ESTATE ATTORNEY AFTER A LOVED
ONE HAS PASSED?
Although it may sound a bit odd, the best time to meet with your estate attorney to discuss the death of a loved one is actually before they have passed away. This meeting can provide important guidance on disability, medical/financial decisions, and identify future problems with estate administration. As long as someone is still alive, even if they are disabled, there are options to address and alleviate problems.
August 2015- Planning For A Beneficiary With Special Needs
Putting together an estate plan is emotionally trying in any case. One wants to keep control and plan for any number of eventualities to protect loved ones. This process is more difficult and much more important when planning for a beneficiary with special needs. In the context of wills and trusts, “special needs beneficiaries” typically refers to those who are currently receiving (or may likely receive in the future) government benefits for a medical condition or disability. Such beneficiaries range from infants with developmental issues to seniors with dementia; relevant medical conditions range from Down’s Syndrome to psychiatric concerns. When creating a plan for a special needs beneficiary, one must make arrangements to provide personal care and financial support.
July 2015 - Supreme Court Recap: Summer 2015
For this month’s newsletter, we asked our summer associate Erin McNamara to provide a briefing on the major cases from last year’s historic Supreme Court docket. Erin is a rising third-year law student at the Marshall-Wythe School of Law at William and Mary.
June 2015 - Should I have mom put my name on her house deed?
Routinely, I am asked if it is a good idea to be put on a parent’s deed to their house. In short, the answer is almost always "no." Let's explore the reasoning behind my assertion.
May 2015 - WHO IS IN CHARGE OF FUNERAL DECISIONS?
When a loved one passes away many people find themselves in a fog of indecision. It is often believed that the estate attorney needs to be contacted immediately. While contacting the attorney is an important step, taking time to mourn with one’s family and loved ones should come first. In reality most people are not emotionally ready to address the legal implications of a death in the days following. The most time sensitive issue is to address memorial preparations. With that said, the next question is usually “Who is in charge of making funeral decisions?”
April 2015 - New Law Protects Your Electronic Information After Death
Effective July 1, 2015, Virginia’s new Privacy Expectation Afterlife and Choices Act clarifies a person’s right to control the privacy of his or her information on the internet after death and codifies the right of a Personal Representative to access such information. The law amended two sections (64.2-109-110) of the Virginia Code and added three new sections (64.2-111-115).
March 2015 - The Premarital Agreement: An Important Document for Your Estate Plan
Premarital agreements (also called prenuptial agreements) are usually not the first matter couples think about after getting engaged. Even when one partner may want to discuss the idea, they often worry about offending their future spouse by broaching this potentially sensitive topic. Premarital agreements, however, are incredibly important documents that can protect you, your family, and your spouse.
February 2015 IRC §645 Election – A Tale of Two Estates
To understand the importance and utility of the IRC §645 election, first one must understand that there are fundamentally two different types of “estates” that must be present to allow for the option of this election. These are a probate estate and a trust estate. A probate estate occurs when there are assets in the sole name of a decedent that must be administered and distributed, through the supervision of the court, to the living beneficiaries/heirs; after all debts, expenses, taxes and claims/conflicts have been dealt with. The probate estate would have its own EIN (entity identification number) for tax purposes and would be required to file its own IRS Form 1041 Fiduciary Income Tax Return. Typically, a trust estate occurs when the decedent dies seized of a funded trust instrument; which governs the administration and distribution of the trust assets to beneficiaries outside of the probate process. Said trust estate would also have its own EIN (entity identification number) for tax purposes and would be required to file its own IRS Form 1041 Fiduciary Income Tax Return.
January 2015 -WHAT TO TELL YOUR FAMILY ABOUT YOUR ESTATE PLAN
After my clients establish their estate plan, I routinely get the question “What should I tell my family about my estate plan?” Since every estate plan and family situation is unique, the details of the answer to this question can vary greatly. However, there are certain common elements of every estate plan that should be communicated to beneficiaries and trusted decision makers (power of attorney agents, trustees, executors). The purpose of this article is to provide a discussion framework for your beneficiaries and decision makers.
December 2014 - News Roundup for JGB
Happy Holidays to our clients and friends. 2014 has been a busy year for Johnson, Gasink & Baxter, LLP and this final newsletter for the year has two important items: our Williamsburg office is moving and TrustGuard™ enrollment for 2015 is now open.
November 2014- When to Update Your Trust
Our lives change constantly. Marriages, divorces, children, and career paths are just a few of the factors that change our circumstances over the course of a lifetime. Your estate plan only captures your intentions at the time you created it. You will need to periodically update your trust for it to accurately reflect your evolving goals. Consequently, it is very important to regularly reevaluate your estate plan.
October 2014- The Shocking Truth About Trust-Based Estate Planning
Recently, we have dealt with a number of situations where clients call us with trepidation to inform us that their financial advisor, or their next door neighbor who is a retired financial advisor, or their friend who knows a financial advisor, has told them that they “do not have enough money for a trust.” They call us understandably confused, scared, and concerned about who they should trust.
September 2014 - The Most Common Mistake with Revocable Living Trusts
Most estate planning failures can be traced to three fundamental shortcomings; a lack of understanding, a lack of implementation, or a lack of caring. When it comes to a Revocable Living Trust, lack of implementation will almost always sound the death knell. All too many people consider the signing of a trust as the final step in the estate planning process. This unfortunately is an incorrect assumption. Full implementation of a trust based estate plan only occurs once it has been fully “funded” after the signing.
August 2014 - JGB Hosts Annual Continuing Education Event
Johnson, Gasink, & Baxter, LLP (JGB) is proud to announce that we are hosting our fifth annual series of continuing education classes this September. These classes provide our professional advisor partners with three hours of credits toward their continuing education requirements. We have secured three hours worth of accreditation for Insurance Agents (Law and Regulations), CFPs, and CPAs. We offer these classes at no charge as a thank you to our professional friends who assist us and our clients
July 2014: Inherited IRA Asset Protection
Recently the Supreme Court of the United States (SCOTUS) heard the case, Clark et ux v. Rameker, Trustee et al. In this case, SCOTUS ruled that Inherited IRA funds are part of the debtor’s bankruptcy estate assets. This may not seem earth shaking at first; however, it has sent financial professional scrambling to find new options for their clients in the quest to protect the beneficiaries of their tax deferred monies. Until now, it was unclear and inconsistent how much asset protection an inherited IRA account would receive in the hands of the beneficiary. SCOTUS’ conclusion is that there is little to no asset protection afforded to these accounts.
June 2014- Probate: A Huge Mistake for Your IRA
In the past few decades more and more companies have shifted employee retirement benefits from defined benefit plans (commonly known as pensions) to defined contribution plans (such as a 401k plan). With the shift away from pensions the public has had no choice but to heavily rely on defined contribution retirement plans to fund their “Golden Years.” At present time, the U.S. Department of Labor estimates more than 88 million people are participating in a defined contribution retirement plan in the U.S. At the end of 2013, The Federal Reserve Board estimated defined contribution plans to be valued in excess of $4.89 trillion and IRA plans valued in excess of $6.16 trillion. In this article, the term IRA is used to encompass all defined contributions plans and Individual Retirement Accounts such as 401(k), 403(b), and Thrift Savings Plans. Even with such broad use of and high accumulation of wealth in these retirement accounts, most individuals don’t give much thought to, let alone seek out advice on, who to name as their retirement plan beneficiary. If no beneficiary is named, an IRA can be subjected to the probate process with disastrous consequences.
May 2014 - How to fix a Probate Mess: Case Studies
Probate is an odd business. There are long waits punctuated by firm deadlines. The rules and forms can be daunting, confusing, and intimidating. As advisors, it is easiest for us to start a probate from the beginning, but we have found our clients much more appreciative when they hire us mid-stream after things become clouded and unclear.
April 2014- Know Thine Attorney
Recently, I have had two new client experiences that prompted me to write this article. I have altered the identifying features of these clients to protect their identities; however, the important lessons/issues illustrated by these instances remain intact.
March 2014- Making Smart Choices to Avoid Scams
A friend recently told me that his retired mom is so wary of telemarketers and people trying to sell her financial products that she only answers the phone when she recognizes the caller’s number. He had to leave a message on her answering machine when he called her from his new cell phone number, only to get an immediate call back once she realized it was him.
February 2014- Does My Adult Child Need a Power of Attorney?
Many of us take for granted the ease in which we can care for our children. On any given day if my daughter should fall and scrape her knee, I can pick her up and give her comfort. If the injury is more serious, I can immediately take her to the doctor’s office and decide the best course of treatment. Yes, my daughter may have an opinion on what Disney character Band-Aid she gets (she is 2 ½ years old), but as her parent I am legally authorized to make decisions on her behalf. This is all true up until the day she turns eighteen, the age of majority in Virginia. Once my daughter is eighteen she is considered an adult, and I am not authorized to make financial or health care decisions on her behalf. Unfortunately this transition from child to legal adult occurs at eighteen regardless of the capacity or maturity of the child. This is of particular concern where parents of special needs children need to continue making decisions for their children well beyond the age of eighteen. Regardless of whether a child has been incapacitated from birth, or a tragic event has put them in a state of incapacity, the same problem persists with parents making decisions for their adult children.
January 2014- Five Things You Should Tell Your Successor Trustees
Happy New Year! This month’s newsletter begins with a brief reminder about the open enrollment for our TrustGuard Program and follows with a list of things you should tell your successor Trustee.
December 2013- TrustGuard Year 1 a Rousing Success
We are proud to report in this, the final Two Things Certain™ Newsletter of the year, that the JGB TrustGuard™ client service program for 2013 far exceeded everyone’s expectations. We have had an overwhelmingly positive response from our TrustGuard™ clients about the program and its services. On November 14, 2013, we held our TrustGuard™ Annual Event. It was well attended and the Attorneys and Staff of JGB enjoyed sharing an evening of delicious food, drink and conversation with our TrustGuard™ clients. During this event we reviewed changes in the law that were addressed and corrected in client documents during this program year, as well as changes to the tax code and possible changes to state and federal laws that we are monitoring moving forward. In addition, we announced that for the 2014 TrustGuard™ program year, we will be focusing on how to prepare now so that your successor Trustees are informed and ready to assist you in the unfortunate event of death or disability, allowing the transition of control of your estate plan to be seamless.
November 2013 - Is My Trust Plan Antiquated?
It seems as if Congress has become increasingly polarized on every issue that makes it to Capitol Hill. Their ferocious debates and apparent inability to come to any consensus makes it hard to believe our bicameral legislature is capable of passing laws at all. With that said, in recent years Congress has actually become quite adept at changing federal estate tax laws. The federal estate tax credit has changed 11 times over the last 17 years, with the lowest credit being $600,000 in 1997. On January 1 of this year, Congress made another adjustment to our estate tax laws with the passage of the American Taxpayer Relief Act (ATRA) of 2012. The ATRA changed the individual estate tax credit to $5,250,000 and is indexed for inflation for future years. Without ATRA, the resulting federal estate tax credit would have reverted back to $1,000,000 per person.
September 2013 - Estate Planning Lessons from Celebrities
Although it is important to learn lessons from your mistakes, it is even better to learn lessons from others’ mistakes. Many celebrities’ estate planning mistakes can serve as valuable lessons for the importance of a well-drafted estate plan.
August 2013 - Estate Planning after DOMA Ruling
Same-sex marriage as a social issue is often a topic of debate which garnishes attention across the nation. An important aspect of whether to recognize these unions, that did not receive much attention before this summer, is how the federal government should treat same-sex couples with respect to estate planning and the administration of government aid and benefits only allowed between legally married couples.
July 2013 - The Disabled Military Child Protection Act of 2013
On Tuesday, June 4, 2013, Congressman Jim Moran (D-VA) introduced the Disabled Military Child Protection Act (H.R. 2249). Previously, on May 23, 2013, Senator Kay Hagan (D-NC) introduced the bill (S. 1076) in the Senate. The bill would provide for the payment of monthly annuities under a Survivor Benefit Plan to a Special Needs Trust for a veteran’s disabled, dependent child.
June 2013 - Do I have the capacity to create a Will?
In 1913 an average man could expect to live to the ripe old age of 51, while a woman could expect to live to the age of 55. Thankfully life expectancies today have improved; a man can expect to live to the age of 76 and a woman can expect to live to the age of 81. However, as our life expectancies have increased, so has dementia. Statistics show dementia affects about 1% of the U.S. population between the ages 60-65 and ranges between 30-50% in the population older than 85. With the population living longer, there is a much higher likelihood that dementia will affect our families and prompt a need to make incapacity decisions for our loved ones. It’s always prudent to have an estate plan in place BEFORE something bad happens, but the onset of dementia brings about important questions regarding the requisite capacity to create a plan.
May 2013 - Choosing your Benefits from the Department of Veterans
No doubt, if you have ever been around group of veterans you will hear them begin to compare numbers sooner or later. One veteran is getting 30% from the VA, another is getting 70%. What do these numbers mean and how in the world does the VA decide who gets what?
April 2013 - Philanthropy: Choosing a charity
Like many of our clients, you are probably charitably inclined. Most of the JGB family gives to charity in life or death. The legal definition of a charitable organization, located in IRS Section 501(c)(3), includes causes that are religious, educational, scientific, literary, promoting public safety or amateur sports, and that prevent cruelty to children or animals.
March 2013 - Is Estate Planning still relevant
You could almost hear the roar of questions coming as soon as the American Taxpayer Relief Act (ATRA) was passed. We braced for the impact. However, the reality of ATRA is much less uneventful than anticipated. The most frequent question asked, post-ATRA, remains, "is Estate Planning still relevant in the wake of ATRA?" The simple answer is a resounding, "Yes!"
February 2013 - THE 2012 AMERICAN TAXPAYER RELIEF ACT
On January 2, 2013, President Obama signed The American Taxpayer Relief Act (ATRA), which is the most recent overhaul of our federal estate tax system. The passage of ATRA seems to have stabilized financial markets and alleviated fears of the US falling off the “Fiscal Cliff.”
January 2013 - Veterans Benefits
Many Veterans and their widowed spouses are unaware that they may be able to qualify for this important veterans benefit. The Aid & Attendance benefit offered by the Department of Veterans Affairs is a pension program available to eligible Veterans or their widowed spouses. It pays up to $2,019 for the Veteran and more than $1,094 to the spouse to assist with long-term care costs and other medical expenses. The Aid & Attendance benefit can be used to pay anyone for home care, including the child of the eligible Veteran or widowed spouse. In addition, it can be used to pay for professional care in the home, nursing home care, assisted living, prescription drugs, insurance premiums and more.
December 2012 - JGB Announces TrustGuard Protection Plan
At the request of our Trust-based Estate Planning clients, JGB has designed TrustGuard™ to provide certainty that a Trust Plan is up-to-date, maintained and funded over time.
July 2012 - The Probate Process
‘Probate’ is a powerful word; often evoking disdain, contempt, anger, or just sheer apathy when it is used in general conversation. However; the word is misused routinely to describe an entire system or process when its pure definition is much simpler. The root of the contemporary use of the word comes from the Latin word prob?re, which means ‘to test and find good.’ Technically, the current, correct use of term ‘Probate’ has not strayed far from its Latin root. In fact, the legal definition of ‘Probate’ simply describes the process of presenting a Last Will and Testament to the Court for authentication. In popular culture, the term ‘Probate’ has incorrectly become used to describe the entire process of administering a decedent’s estate. In an effort to avoid fighting this battle in vain; I have become assimilated into the incorrect use of the term in my practice.
June 2012 - Dirty Deeds of Gift
It’s all too often that I have clients who look for the “simple” fix to immediately transfer their family land down to the kids. It always seems that they have been given general advice (sometimes from a lawyer, many times not) that the solution to their dilemma is to use a simple “Deed of Gift.” If only simple Deeds of Gift were that simple! On its face a Deed of Gift appears to be innocent and benign. In some cases it is appropriate to use; however their consequences are not often discussed or given due consideration.
May 2012 - Letters of Instruction in Estate Planning
Too often, clients feel shoehorned into antiseptic legal jargon in their will or trust. As a lawyer, I use court-sanctioned terms like ‘maintenance and education’ because I want the Trust to be legally ironclad. I imagine my client might prefer to see ‘college room and board.’ In fact the client may well mean something specific along the lines of: ‘college at a state school for no more than four years unless there is a really good reason and maybe graduate school but only if the degree will make money and also high school tuition if needed but not a boarding school unless, I guess, that is also really needed…’ As your lawyer, I will stick to the accepted legalese, but your intent is extremely important. You can explain your intent to your Trustee by writing them a personal document called a ‘Letter of Instruction.’
April 2012 - JGB Estate/Trust Administration 101
We routinely are asked the question by clients and potential clients, “When I die, is this estate plan implemented automatically?” The universal answer is a resounding ‘No’. The existence of a Will or Trust document does not, by itself, make anything happen automatically. The estate plan provides the framework within which the action is implemented to accomplish your predetermined goals and objectives. In simpler terms, your estate plan provides your marching orders which must be carried out by your designated fiduciary.
March 2012 - Estate Planning for Unmarried Couples
In my experience working with clients over the years, it seems that people generally fall into two categories; they do not have a formalized estate plan, or their current plan is woefully inadequate. This is especially true with unmarried couples. For the context of this discussion, the term "unmarried couples" is intended to include both unmarried heterosexual and homosexual couples.
February 2012 - Exciting News!
Dear Friends: This has been a busy month for the law firm of Johnson, Gasink & Baxter, LLP (JGB). We are very proud to make two announcements: We have acquired the law practice of a dear friend and colleague and have been honored and humbled to be again recognized by ‘Super Lawyers’ magazine.
January 2012 - "Isn't This All Just Boilerplate?"
“Isn’t this all just boilerplate?” the man sitting across the table said, clearly with a sour look on his face and a negative inflection in his voice. As I quickly quelled my knee-jerk reaction to berate him with a self-important diatribe; I calmly explained the error of his reasoning that led him to such a statement.
December 2011-What Does a Transfer On Death (TOD) Designation Really Solve?
Although staggering in number, around 45% of U.S. adults have never taken the time to memorialize their wishes in a Last Will and Testament. Many people feel that their personal circumstances do not meet the level of complexity, nor does their wealth meet sufficient levels to warrant "formal" Estate Planning. Albeit often incorrect, the belief that complexity and/or wealth are necessary for "formal" Estate Planning continues to plague families dealing with the death and incapacity of their loved ones. Although many people do not have formal Wills, many rely on Transfer on Death (TOD) designations and Payable-on-Death (POD) designations, sometimes without fully understanding the intricacies and consequences.
November 2011 - Why You Should Have a Living Trust
Should you look into a Living Trust Plan? Trusts have become increasingly common and have many benefits. They function as a sort of will substitute and can save your heirs substantial time and money. To help you understand wills and Trusts, this article begins with an analysis of the pros and cons of a will and then compares a will to a Living Trust
October 2011 - NFA Trusts
The climate against privately owned firearms can often be described as politically hostile at the local, state and federal levels, especially when dealing with items covered by the National Firearm Act (“NFA”). It is illegal for any person to possess an NFA item that is not registered to that person in the NFA Registry. It is also illegal to transfer an NFA item without complying with several NFA transfer rules. An NFA trust is a legal instrument which can be used to acquire, control, regulate and transfer the private use of NFA (Class 3) items, weapons, suppressors and other destructive devices.
September 2011 - Do I Need to Fund My Revocable Living Trust?
Every Revocable Living Trust Estate Plan needs periodic review and upkeep to maintain its relevance regarding family, resources, as well as changes in the law. The 'funding' of the trust is equally important to review, to be certain that assets are coordinated with the goals and objectives of the estate plan.
August 2011 - Veterans Aid and Attendance Benefits
‘Aid and Attendance’ benefits (A&A) provide funds to help veterans pay for in-home care. Unlike standard pensions offered to military retirees, this little-known program offers financial assistance to any qualified veteran.
July 2011 - What You Need to Know About Incapacity, Death and Trusts
We routinely get the question, “What should my spouse or children do with regards to my trust if I become incapacitated or die?” Every family situation and trust instrument is unique. As such, the specific details of the answer to this question can vary greatly. However, there are common threads that run through most families and trust instruments to which almost everyone can relate. The purpose of this article is not to describe in detail all the aspects of trust administration at incapacity or death; but rather, to provide you with a basic framework so that you can quickly achieve a sense of comfort and ownership of the trust administration process.
June 2011 - Keeping the Family Inheritance in the Family
Our children must face many challenges throughout their lives, and they will invariably make mistakes along the way. Every parent wants to shelter and protect their children as much as possible, but without a properly designed estate plan, parents can add more problems to their children's lives. A fairly common mistake among parents is to leave assets outright to their children (through not having an estate plan or having a poorly drafted plan).
May 2011 - Three Things You Need to Know About Wills
We know we need to get our affairs in order. At a minimum, we need to tell our families who is to take control of our financial and medical affairs at our incapacity or death. This month’s newsletter focuses on three basic things everyone needs to know about their will.
April 2011 - The Brady Bunch Effect: Planning for Blended Families
As a society, we have come to expect that one out of two marriages will end in divorce; and 60% or more of second marriages will fail. According to the U.S. Census Bureau, 66% or more of the marriages and non-marital cohabitation relationships that end in dissolution, involve children in the relationship. It is predicted that 50% of the children in our country will experience a divorce before they are 18. Approximately half of all Americans are currently involved in some form of step-relationship. It is now estimated that more Americans are living in step families than in nuclear families. Regardless of the method of analysis, it is apparent that blended families are now the new “norm.”
March 2011-Planning Successful Business Succession with Buy/Sell Agreements
It is an all too common mistake for new business owners (and even long-time business owners) to focus their energy exclusively on day-to-day operations and fail to implement the right business planning. One occurrence that emphasizes the importance of having the right business plan in place is the death of a business partner. In most situations, decedents leave their business interest to their spouse or children. This can be a problem for the other partners because they are forced into business with the spouse and/or children of their deceased partner. The solution to this sticky situation is a properly drafted Buy-Sell Agreement created before the death of a partner. The Buy-Sell Agreement can lay out the precedence of business interest succession; whether it be to existing shareholders, the business itself, or even family members of the deceased shareholder.
February 2011 - Planning for Long Term Care
Will the Nursing Home take my house? No. But many sell their home to pay for nursing home costs or face the prospect of the state ‘recovering’ their home to repay medical expenses after death. Long term care is a constant worry. Clients routinely ask us if they will outlive their money. With monthly costs that can exceed $5,000, baby boomers and retirees fret about how they would pay for nursing home care in the event it is needed. Every seminar, it seems, an attendee asks me if the nursing home will take his or her house. These worries center on fears of losing money, losing control, and the general feeling of confusion about the options for paying for a nursing home.
January 2011- ESTATE PLANNING RESOLUTION FIELD GUIDE FOR 2011
Happy New Year to all of the friends, family and clients of JGB! Our law firm was fortunate to have a successful 2010 because of your support and referrals. We plan on building on that success in 2011 and beyond. As 2010 came to a close, we were routinely asked, “What should we be concerned about with regard to our estate plan for 2011?” Given the high frequency of this question, we decided to devote our January newsletter to help you get squared away for a successful 2011.
October 2010- What is a GRAT?
A Grantor Retained Annuity Trust (GRAT) is a planning device used to give assets to beneficiaries while minimizing Estate & Gift Taxes. Given today’s extremely low interest rates, those with estates large enough to worry about the Federal Estate Tax should investigate using a GRAT to reduce their death taxes. As there is no Generation-Skipping Transfer Tax in 2010, this year is ideal for shifting wealth to grandchildren in particular.
September 2010- ILITS- Shiny and New... Again
“It's deja vu all over again” – applied to the current context of estate planning, this famous Yogi Berra quote could easily be made to refer to the resurgence of Irrevocable Life Insurance Trusts (“ILITs”). For the uninitiated, this begs the first question, “What is an ILIT?” The answer itself is somewhat of a paradox, being simultaneously simple and terribly complicated. First the simple answer: an ILIT is an irrevocable trust into which individuals place life insurance for the benefit of others. Now we will use the remainder of this article to discuss the complicated answer.
August 2010- Special Needs Planning in Virginia
Everyone wants to protect their loved ones when they are gone. When one of the beneficiaries is a “Special Needs Beneficiary,” the will/trust must be prepared with extra care so that an inheritance does not disrupt the beneficiary’s support system. WHO IS A “SPECIAL NEEDS BENEFICIARY?"
July 2010- Keeping the Family Cabin in the Family
Many families count among their most treasured possessions some distinctive ancestral property. This may be a mountain cabin, a lake, beach, or river house, a hunting lodge or even the old family farm. These properties are dear to families as both a place of respite and as places which in some way embody the family’s identity. What distinguishes ancestral property for you is your desire to keep the property in your family for generations. Maintaining any property is difficult; a property cannot navigate the course of two or three generations unless the original generation made provisions for the property’s management and support. This article will first explore the pitfalls of ancestral property and then explain in brief how your goals could be better served by creating a trust or business entity to hold the property for your descendants.
June 2010- What Type of Corporate Entity Should I Choose?
When starting a business, one of the first critical decisions you make is what type of entity you wish to use as your operational structure. The most common choices include: C Corp, S Corp, LLC, Partnership and Sole Proprietor. Each structure can provide various positive benefits and negative obstacles to the operation of your business, depending on various factors. This article will discuss the difference between C Corps and S Corps. We will not discuss LLC’s or Partnerships in any great detail; but, rather leave the discussion of these entities for another edition of our newsletter.
May 2010- Probate in Virginia
Most everyone has heard of Probate, but few understand what is involved with Probate in Virginia. The word “Probate” comes from the Latin word probatum which means “to prove.” Probate is the court regulated process for distributing a decedent.s assets to the beneficiaries, after all debts, expenses, taxes, and claims have been settled. A Last Will and Testament must be Probated to be effective. If there is no valid Will the circuit court distributes according to the default intestate succession laws through the Probate process.
April 2010- Should I Put My Timeshare Into My Trust?
Welcome to the April edition of our newsletter. As part of our commitment to making trust plans work, Johnson, Gasink & Baxter, LLP transfers timeshares into trusts all over Virginia. We are happy to prepare timeshare deeds both for existing clients and for anyone who needs help funding their trust.
March 2010- ROTH CONVERSION: STEAK OR JUST SIZZLE?
The attorneys of Johnson, Gasink, & Baxter, LLP (JGB) welcome you to this edition of our newsletter in which Jeremy C. Johnson explores Roth Conversions. For our professional advisors, we will be offering a Continuing Education class on this and other topics on March 23rd at The Chesapeake in Newport News.
February 2010- Avoiding the Pitfalls of the 2010 Estate Tax
2010 continues to challenge us with both unexpected weather and estate tax policy. The attorneys of Johnson, Gasink, & Baxter, LLP (JGB) welcome you to this edition of our newsletter in which Spencer Baxter explores the implications of the chaos in the Federal Estate Tax on existing plans. For our professional advisors, we will be offering a Continuing Education class on this and other topics on March 23 at The Chesapeake in Newport News. Watch next month’s newsletter for more details!
January 2010- The Estate Tax is Dead. Long Live the Estate Tax
2009 has been a busy year. With the support of our many friends, we formed the Law Firm of Johnson, Gasink & Baxter, LLP and have been thrilled with our success and with the support our friends have shown us. In the new year, we look forward to new challenges as we adjust to changes in the Federal Estate Tax (see article below), as we welcome new members of our family (figuratively and literally), and as we continue to teach about Wills, Trusts, Estates, and Business