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Dispelling Common Myths About Living Trusts

Most people have a general idea of what a Last Will and Testament is and the purpose it serves. However, if you mention establishing a Living Trust, many people will look at you quizzically with no idea what you’re referring to, or they’ll mistakenly claim that a Living Trust is reserved for “rich people.” This is not the case. In fact, there are many misconceptions surrounding Living Trusts. Below are some of the most common myths about Living Trusts and important facts you need to know.

Myth No. 1 – I Don’t Need a Trust Because I am Not Wealthy

This is, by far, the most common misconception surrounding trusts – they are only worthwhile for people who are wealthy. Not so. The benefits of having a revocable living trust in an estate plan are plentiful and may actually wind up costing you less than the traditional Last Will and Testament. How? Well, the costs associated with probate and court conservatorships/guardianships (which a living trust can avoid) may actually wind up taking a higher percentage from estates of smaller size than simply administering your estate through a trust. There is also the added benefit of being able to manage an estate privately without forcing your family to deal with a court. Actually, creating a trust based plan can have a greater impact for smaller estates. Typical example is if there is a stroke, dementia, Alzheimer’s then the long term care expenses will erode the estate completely if you have not done proper planning ahead of time.

Myth No. 2 – Living Trusts are Costly to Create

Compared to what? If you or a family member incur a long term care health issue your costs could be hundreds of thousands of dollars without proper planning. A well-counseled and detailed living trust may have a higher upfront cost when compared to drafting a cookie-cutter Will but over the life of the plan we have found the costs overall are consistently lower than doing very little up front and letting the chips fall where they may.  It is important to spend a little extra time up front to think through common challenges that  aging people face and preparing for these issues in advance (long term care, navigating health care options, navigating living options, which resources are suitable for you, asset protection for the spouse or family, etc.). You are paying for a plan not just documents. Assets also need to be titled properly in advance to assure a smooth transition. Word processed documents alone don’t achieve this goal.  When you factor in probate costs, the costs of a conservatorship if you become incapacitated and the costs of a guardianship if you leave assets to a minor child, the costs associated with a Will can actually wind up being much higher than the costs associated with established a trust.

Myth No. 3 – Creating a Trust Means Losing Control Over My Property

If you are your own trustee, you will be able to do anything with your assets that you could do before they were transferred into the trust. This means you can buy or sell property, change your trust or even cancel the trust entirely. If you decide to name a third party to manage the trust as trustee, you retain the right to replace the trustee while you are alive and you can transfer that authority to a beneficiary when you pass on. if you are not satisfied.

Myth No. 4 – It is Expensive to Hire a Trustee

As long as you are your own trustee, you do not pay fees for management of the trust. Successor trustees are entitled to receive a fee, but family members often forego receiving a fee. If you choose a professional trustee, they will only charge a fee when they start to act on your behalf. Furthermore, a professional trustee usually only charges a small percentage that is paid through the trust assets.

Speak to an Estate Planning Lawyer Today

As you can see, there are many myths and inaccuracies associated with living trusts. If you are interested in creating an estate plan, you should consider incorporating a detailed trust into your plan. To learn more, reach out to InSight Law today.

Alkaline Hydrolysis – The Future of “Green” Funerals?

In April 2016, Business Insider published an article titled, “Traditional Burials are Ruining the Planet.” More information has surfaced showing the environmental toll that is taken when someone is buried in a traditional casket featuring steel, wood and embalming fluid.

Cremation became a popular alternative to traditional burials. In fact, cremation rates have increased to nearly 75 percent in some states, according to the Cremation Association of North America. For those people interested in being even more environmentally-conscious are considering a procedure known as “alkaline hydrolysis.” Is it right for you? Can you even do it in the state you reside in? Find out below.

What Exactly is Alkaline Hydrolysis?

It is a process that has been around for over 100 years and involves dissolving the remains of a human in an alkaline solution. It involves a mixture of water and potassium salt. It is also referred to as biocremation, aquamation, or resomation.

Controversial Cremation?

The practice of Alkaline Hydrolysis has drawn criticism based on people interpreting the practice as somewhat “gruesome.” This is because the perception of Alkaline Hydrolysis is that a human body is dissolved in chemicals and poured down the drain. It has also raised public health concerns due to the alleged risk that the liquified remains could wind up in drinking water.

State Laws & Regulations

As of the date of this posting, only 13 states in the United States have legalized the practice of alkaline hydrolysis, including: Colorado, Florida, Georgia, Idaho, Illinois, Kansas, Maine, Maryland, Minnesota, Missouri, Oregon, Vermont, and Wyoming.

As you can see, Alkaline Hydrolysis is not legal in Virginia or West Virginia. Though, Maryland residents can utilize this practice, if they so choose. Maryland legalized alkaline hydrolysis in 2010, when the state defined cremation as the “means the process of reducing human remains to bone fragments through intense heat and evaporation, including any mechanical or thermal process,” according to Maryland Business Regulation Code § 5-101.

Speak to an Estate Planning Attorney Today

To get more information about final arrangements, including the potential to make your funeral “green,” take the time to schedule a meeting with the legal team at InSight Law.

You Can Now Retire in Margaritaville

If you’re a diehard Jimmy Buffett fan (also known as a Parrothead) you’ll now have the opportunity to go “searchin’ for your lost shaker of salt” at Latitude Margaritaville, a new Florida retirement community.

Jimmy Buffett is partnering with an Ottawa-based developer called Minto Communities to develop the Margaritaville-themed community in Daytona Beach, Florida. The community will eventually have close to 7,000 homes for residents age 55 and older.

The homes will be built on streets affiliated with lyrics to Buffett’s 1977 mega hit “Margaritaville.”

For example, you will be able to live on Flip Flop Court, Coral Reef Way or St. Somewhere Drive. You’ll be able to take your dog to the “Barkaritaville” pet spa and work out in the Fins Up! Fitness Center or the Paradise Pool. You’ll also be able to take classes at the Workin’ and Playin’ Center or catch a show at the Last Mango Theater, according to The Star. And, of course, you’ll be able to order a Cheeseburger in Paradise at the Latitude Bar & Chill restaurant.

The Buffett Empire

Some people mistakenly believe Jimmy Buffett is a laidback singer. In reality, he is more akin to Warren Buffett. He has an empire of resort hotels and a catalogue of popular products including Margaritaville-branded items such as rafts and blenders. Here is a video highlighting one of his popular hotel properties:

In addition, there is a Broadway musical opening that features his music. Oh yeah, and the 71-year-old musician continues to tour with his band.

Reports indicate that Buffett’s business ventures bring in around $1.5 billion annually. Some people claim there’s a woman to blame, but Buffett knows his business success is his “own damn fault.” When he was approached about expanding the Margaritaville brand into an active-adult community, Buffett seized on the opportunity. He recognized that it was a “natural fit” since a large percentage of his fans are aging baby boomers who have followed his career for decades, according to the Washington Post.

Retiring in an Upscale Community Requires Proper Planning

If you hope to one day retire and enjoy the good life at Latitude Margaritaville, you need to have a retirement plan in place, in addition to a detailed estate plan. If you have questions about planning for your future, contact InSight Law today.

Important Info You Need to Know About How Divorce Can Impact Your Estate Plan

Most people never expect to get divorced. They love their spouse and anticipate spending the rest of their lives in marital bliss. Unfortunately, the data indicates this is not the norm. In fact, in the United States, nearly half of all married couples wind up getting divorced, according to the American Psychological Association.

This is why it is important to be prepared and have as much information at your disposal. Below is a general overview of how a divorce can impact your estate plan.

How Divorce Can Impact Your Will

When you get divorced, any items or funds that are directed to your ex-spouse will be automatically revoked, according to Virginia Code § 64.2-412(A). This statutory provision means your ex-spouse will lose the following rights, responsibilities, and benefits described in your Will:
·        General or special power of appointment;
·        Executor status
·        Guardian status
·        Any assets designated to go to the ex-spouse

Despite the automatic revocation, it makes more sense to take the time to update your Will to ensure there is no possibility your ex-spouse could make a legal argument in favor of receiving any assets from your Will.  Also, the period of time between separation and final divorce decree or settlement agreement could last from a few months to a few years. During this period, the disposition of your assets should be clear if something happens to you.

How Divorce Can Impact Your Trust

You need to take action if you get divorced and have a trust. Why? Because the Uniform Trust Code does not automatically revoke the beneficiary status of an ex-spouse upon divorce. Therefore, if you do nothing and your ex-spouse remains listed as the primary beneficiary of your trust, they will still receive those funds when you pass on.

How Divorce Can Affect an Advance Medical Directive

When your divorce is finalized, you may believe this automatically revokes all rights and responsibilities from your now-ex-spouse. This is not correct. In fact, under the Virginia Health Care Decisions Act, an advance medical directive is not automatically revoked as a result of a divorce. Therefore, you need to be proactive and expressly revoke the existing advance medical directive naming your ex-spouse as your health care agent.

How Divorce Can Affect Designations of Beneficiaries in Your Estate Plan

Fortunately, automatic revocation exists when it comes to beneficiary designations. According to Va. Code § 20-111.1(A), a revocable beneficiary designation providing for the payment of a death benefit to your ex-spouse is revoked.  This includes any life insurance policies, retirement accounts, or any other contracts providing for the payment of benefits to a spouse upon your passing.
However, if you are a federal employee, or your life insurance plan is governed by federal law, your ex-spouse will receive the life insurance proceeds, if they remain listed as the designated beneficiary.

Have Questions? Contact an Experienced Trust and Estate Planning Attorney in Ashburn

Divorce can significantly impact an array of provisions within your estate plan. As a result, if you are in the midst of a divorce, or just had your divorce finalized, take the time to sit down with an experienced Ashburn trust and estate planning attorney to take the necessary steps to update your estate plan.

Important Info You Need to Know About How Divorce Can Impact Your Estate Plan

Most people never expect to get divorced. They love their spouse and anticipate spending the rest of their lives in marital bliss. Unfortunately, the data indicates this is not the norm. In fact, in the United States, nearly half of all married couples wind up getting divorced, according to the American Psychological Association.

This is why it is important to be prepared and have as much information at your disposal. Below is a general overview of how a divorce can impact your estate plan.

How Divorce Can Impact Your Will

When you get divorced, any items or funds that are directed to your ex-spouse will be automatically revoked, according to Virginia Code § 64.2-412(A). This statutory provision means your ex-spouse will lose the following rights, responsibilities, and benefits described in your Will:
·        General or special power of appointment;
·        Executor status
·        Guardian status
·        Any assets designated to go to the ex-spouse

Despite the automatic revocation, it makes more sense to take the time to update your Will to ensure there is no possibility your ex-spouse could make a legal argument in favor of receiving any assets from your Will.  Also, the period of time between separation and final divorce decree or settlement agreement could last from a few months to a few years. During this period, the disposition of your assets should be clear if something happens to you.

How Divorce Can Impact Your Trust

You need to take action if you get divorced and have a trust. Why? Because the Uniform Trust Code does not automatically revoke the beneficiary status of an ex-spouse upon divorce. Therefore, if you do nothing and your ex-spouse remains listed as the primary beneficiary of your trust, they will still receive those funds when you pass on.

How Divorce Can Affect an Advance Medical Directive

When your divorce is finalized, you may believe this automatically revokes all rights and responsibilities from your now-ex-spouse. This is not correct. In fact, under the Virginia Health Care Decisions Act, an advance medical directive is not automatically revoked as a result of a divorce. Therefore, you need to be proactive and expressly revoke the existing advance medical directive naming your ex-spouse as your health care agent.

How Divorce Can Affect Designations of Beneficiaries in Your Estate Plan

Fortunately, automatic revocation exists when it comes to beneficiary designations. According to Va. Code § 20-111.1(A), a revocable beneficiary designation providing for the payment of a death benefit to your ex-spouse is revoked.  This includes any life insurance policies, retirement accounts, or any other contracts providing for the payment of benefits to a spouse upon your passing.
However, if you are a federal employee, or your life insurance plan is governed by federal law, your ex-spouse will receive the life insurance proceeds, if they remain listed as the designated beneficiary.

Have Questions? Contact an Experienced Trust and Estate Planning Attorney in Ashburn

Divorce can significantly impact an array of provisions within your estate plan. As a result, if you are in the midst of a divorce, or just had your divorce finalized, take the time to sit down with an experienced Ashburn trust and estate planning attorney to take the necessary steps to update your estate plan.