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Estate Planning
An estate plan includes legal documents that outline the disposition of personal property and assets upon a person’s death. A proper estate plan ensures that a person’s wishes are carried out, and that he or she is able to pass the greatest amount of assets to their beneficiaries while incurring the least amount of taxes and administrative costs. If a person dies without having taken appropriate actions, their assets will pass according to state statutes, rather than their own wishes.

A sound estate plan is peace of mind. The Elder Planning and Elder Law Firm is the Washington, D.C.-area’s leading estate planning firm. We specialize in estates and have guided thousands of clients through the process of properly preparing and executing sound estate plans that are tailored to their specific needs.

Estate planning services and considerations include:

Last will and testament
Supplemental Needs
Credit Shelter
Selecting an executor, personal representative, or trustee
Selecting a guardian
Medical directives
Power of attorney

You may read more about these services and issues below. And please contact us for a consultation:

Virginia (703) 243-3200
Maryland (301) 214-2229
Washington DC (202) 223-0270


Fundamental Considerations
When preparing an estate plan, there are many things to consider. Our job is to guide you through all of the steps and considerations so that we develop and execute the most advantageous estate plan for you. Here are some issues to consider:

Do I need a will or a trust?
Unless you have no assets of any kind, the answer is yes. If you die without a last will and testament or a revocable living trust, state law will control the disposition of your individually held property. Settling your estate without a will or trust will be more troublesome and more costly, and it will be burdensome for your loved ones.

Who should inherit my assets?
If you are married, you must first consider marital rights. States have different laws designed to protect surviving spouses.  If you die without a will or trust, state law will dictate how much passes to your spouse.

Once you've considered your spouses rights, ask yourself these questions:

Should your children share equally in your estate?
Do you wish to include grandchildren or other beneficiaries?
Would you like to leave any assets to charity?

Which assets should they inherit?
You may wish to consider special questions when deciding which assets your beneficiaries should inherit, such as:

Who are your beneficiaries? Who do you wish to receive assets, and in what amounts?
If you own a business, should the stock pass only to your children who are active in the
business? Should you compensate the other children with assets of comparable value?
If you own rental properties, should all beneficiaries inherit them? Do they all have the ability to manage property?
If you own art or other items, do these have a special meaning for certain beneficiaries?

When and how should they inherit the assets?
To determine when and how your beneficiaries should inherit your assets, you need to focus on three factors:

The potential age and maturity of the beneficiaries
The financial needs of you and your spouse during your lifetimes
Tax implications

An outright bequest offers simplicity, flexibility, and some tax advantages, but you have no control over what the recipient does with the assets once they are transferred, and that may not be the best tactic if the recipient is young or not in the position to handle the asset. In a case like that, a revocable living trust may be better.

What is the difference between a last will and testament and revocable living trust?
Two primary documents can be used for transferring your assets on your death: a last will and testament or a revocable living trust. The primary difference between them is that assets placed in your revocable living trust avoid probate at your death.

Neither a will nor the revocable living trust reduces estate taxes, though both can be drafted to do so. Whether a will or a trust is better for you depends on your specific circumstances and preferences.

What is a last will and testament?
A last will and testament is a legal document that outlines what you wish to happen to your estate and assets upon your death. If you choose solely a will, your estate will have to go through probate.

What is probate?
Probate is a six-step court-supervised process to protect the rights of creditors and beneficiaries and to ensure the orderly and timely transfer of assets. A will can be advantageous because it provides standardized procedures and court supervision. 

What is a trust?
A trust is a legal agreement through which a trustee—a person or an institution, such as a bank or law firm—holds legal title to property for another person, called a beneficiary. The rules or instructions under which the trustee operates are set out in the trust instrument.

There are advantages to establishing a trust, depending on your situation. Best-known is avoiding probate—any property in the trust prior to the grantor’s death passes immediately to the beneficiaries. This can save time and money. 
Certain trusts can also result in tax advantages both for the grantor and the beneficiary. These are often referred to as “credit shelter” or “life insurance” trusts. Other trusts may be used to protect property from creditors or to help the grantor qualify for Medicaid or other entitlements.

Unlike wills, trusts are private documents and only those individuals with a direct interest in the trust are privy to the trust assets and distribution. Provided they are well-drafted, another advantage of trusts is their continuing effectiveness even if the grantor dies or becomes incapacitated.

Trusts fall into two basic categories: testamentary and living trusts.

A testamentary trust in one created by your last will and testament, and it does not come into existence until you die. In contrast, a living trust starts during your lifetime. There are two kinds of living trusts: revocable and irrevocable.

What is a revocable living trust?
Revocable trusts are often referred to as living trusts because they are in effect during the grantor’s lifetime. With a revocable living trust, the grantor maintains complete control over the trust and may amend, revoke, or terminate the trust at any time. Revocable living trusts are generally used for asset management, probate avoidance, and tax planning.

Revocable living trusts can be useful when the beneficiaries are young or immature or when your estate is large. They can also provide the professional asset management capabilities an individual beneficiary lacks.

What is an irrevocable living trust?
An irrevocable living trust cannot be changed or amended by the grantor. Any property placed into the irrevocable living trust may only be distributed by the trustee as provided for in the trust document itself. For instance, the grantor may set up a trust under which he or she will receive income earned on the irrevocable living trust property but that bars access to the principal. This type of irrevocable living trust is a popular tool for Medicaid planning.

What is a testamentary trust?
A testamentary trust is a trust created by a last will and testament and has no power or effect until the will is probated. Although a testamentary trust will not avoid the need for probate and will become a public document, it can be useful in accomplishing other estate planning goals. For example, the testamentary trust can be used to reduce estate taxes on the death of a spouse or provide for the care of a disabled child after the assets are probated.  It can also protect assets for a disabled spouse or child who is receiving entitlement benefits.

What is a supplemental needs trust?
A supplemental needs trust enables the grantor to provide for the continuing care of a disabled spouse, child, relative, or friend. The beneficiary of a well-drafted supplemental needs trust will have access to the trust assets for purposes other than those provided by public benefits programs. In this way, the beneficiary will not lose eligibility for benefits such as Supplemental Security Income, Medicaid, and low-income housing. A supplemental needs trust can be created during life or as part of a will.

What is a credit shelter trust?
Credit shelter trusts are a way to take full advantage of the estate tax exemption. The first $5 million of an estate is exempt from taxes, so theoretically a husband and wife would have no estate tax if their estate was less than $10 million. However, if one spouse dies and leaves everything to the surviving spouse, the surviving spouse may have an estate that is greater than $5 million. When the surviving spouse dies, any part of the estate over $5 million will be subject to estate tax.

To avoid this, the spouses can create a credit shelter trust as part of their estate plan. When one spouse passes away, the first $5 million of that spouse’s estate is put into a trust. The surviving spouse can receive income from the trust, but as long as he or she does not control the principal, the money will not be included in the surviving spouse’s estate when he or she passes away.

What does an executor, personal representative, or trustee do?
Whether you choose a will or trust, you will need someone to administer the disposition of your estate—an executor or personal representative in the case of a will, and a trustee in the case of a trust. This person or institution serves your interests and disposes your assets after your death and has several major responsibilities, including:

Administering your estate and distributing the assets to your beneficiaries
Making certain tax decisions
Paying any estate debts or expenses
Ensuring all life insurance and retirement plan benefits are received
Filing the necessary tax returns and paying the appropriate federal and state taxes.

How do I select an executor, personal representative, or trustee?
A trusted individual, such as a family member, friend, or professional adviser, or an institution, such as a bank or trust company, can serve in these capacities. Many people name both an individual and an institution to leverage their collective expertise.

When choosing, be sure to select someone who is willing to serve, and consider paying a reasonable fee for the services. The job isn’t easy, and not everyone will want or accept the responsibility. Provide for an alternate in case your first choice is unable or unwilling to perform. Naming a spouse, child, or other relative to act as executor is common, and he or she can hire any professional assistance as needed.

Also make sure the executor, personal representative, or trustee doesn’t have a conflict of interest. For example, think twice about choosing an individual who owns part of your business, a second spouse, or children from a prior marriage. A co-owner’s personal goals regarding your business may differ from those of your family, and the desire of a stepparent and stepchildren may conflict.

Do I need to select a guardian for my children?
If you have minor children, you will need to select a guardian as part of your estate plan. The well-being of your children is your priority, and there are serious financial, emotional, and practical issues to consider:

Will the guardian be capable of managing your children’s assets?
Will the guardian be financially strong? If not, consider compensation.
Will the guardian’s home accommodate your children?
How will the guardian determine you children’s living costs?

You can name separate guardians for your child and trustees for his or her assets. Taking the time to name a guardian or guardians now ensures your children will be cared for as you wish if you die while they are still minors.

Who should draw up my estate plan?
Only an experienced attorney who specializes in trusts and estates should draft your documents. A seasoned attorney can ensure that you have considered every option and that your will or trusts are designed with the utmost care and attention, with your specific needs and goals in mind. In addition, your attorney represents an ongoing relationship and a point of contact during a delicate time period, and will be there for you should a crisis occur. 


Call us today for an assessment of your Life Care options

Virginia (703) 243-3200
Maryland (301) 214-2229
Washington DC (202) 223-0270

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