Far too often, Virginia residents avoid estate planning until circumstances force the issue. Regardless of the psychology behind your estate planning avoidance, the likely reason most people put off this important subject is confusion. We tend to avoid what we do not understand; but by doing so, you could be costing yourself and your loved ones precious resources.
The seasoned Virginia Estate Planning Attorneys at Promise Law address the five most confusing aspects of estate planning so you can understand its importance and why you should stop avoiding it. These explanations are brief – one of our estate planning lawyers can provide more specific information during a confidential consultation.
1. Death and Taxes
While both death and taxes may be inevitable, both are also supremely important to your estate plan. Death Taxes are levied on your beneficiaries by federal and some state governments before they can inherit your property. They come in the form of:
- Inheritance Taxes – There is no federal inheritance tax, and only six states charge this tax; fortunately, Virginia isn’t one of them. However, if you inherit property in Iowa, Kentucky, Maryland, Nebraska, New Jersey or Pennsylvania, you may owe inheritance tax.
- Estate Taxes – This “is a tax on your right to transfer property at your death.” This is paid by your estate, and can reduce the inheritance left to your beneficiaries. The federal estate tax exemption is quite high, but 12 states and DC also charge an estate tax – again, not Virginia.
- Capital Gains Taxes – You could owe this tax if you sell an asset for more than its original value or worth.
2. Probate Concerns
Probate is the process that validates your will and is concerned with administrating it. This is typically a time-consuming process that delays bequeathing your assets to your beneficiaries and can even cost you (or them) money. Astute estate planning can help you avoid probate for most of your assets, but the particulars can be complex and confusing, especially for large estates.
3. Protecting Assets
When you have accumulated a large number of assets (or large value assets), they are always at risk. It’s the old story of the “have-nots” wanting everything belonging to the “haves,” so your assets need legal protection. Creditors, greedy relatives, frivolous lawsuits, excessive taxation and even Medicaid long-term care can all pose a significant risk to your assets, leaving you with little or nothing for your future or your beneficiaries. However, many asset protection strategies and tools exist, and how they operate can be confusing.
4. Choosing Qualified Fiduciaries
Fiduciaries are those persons appointed to legally control your assets for the benefit of your beneficiaries. Most estate plans will include an executor, who is charged with carrying out the instructions in your legal will; and a trustee (or multiple trustees), who are charged with controlling any assets held in a trust or trusts. Choosing these fiduciaries is not a one-time task – those chosen can become disqualified, die or otherwise need to be changed. Plus, choosing the wrong people for these tasks could be catastrophic.
5. DIY Estate Planning Websites
Everything is available over the internet these days, and that can fool you into believing that downloadable DIY estate planning forms are just as reliable as those crafted by a VA Estate Planning Attorney. This can be the most confusing aspect of all – because using DIY estate planning forms is a grievous mistake. Boilerplate forms cannot possibly include the nuances of different state requirements and laws. And these websites do not come close to providing the information you need for effective estate planning.
Don’t avoid estate planning any longer. Call Promise Law in Newport News, VA at (757) 866-3730 or contact us online for seasoned assistance with your estate planning. We offer a FREE Estate Planning Workshop that includes a complimentary consultation with an experienced estate planning attorney.