27 October

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The Burden of Inheritance

Many people mistakenly believe that inheriting a large estate is some wondrous thing akin to winning the lottery. All of sudden, you are presented with access to vast sums of money, large pieces of property, etc. Such assets can completely change your standard of living. Nevertheless, there are numerous “burdens” associated with inheritance. One of the biggest burdens is the emotional trauma associated with inheritance. We must not forget that someone died in order for an estate to be distributed. Along with the emotional toll of inheritance is the large amount of time and work that must go into properly distributing a large estate. If you are selected as the trustee or executor of a sizable estate, you are likely going to feel overwhelmed at some point during the process. Why? Because you are tasked with itemizing all of the assets listed in the estate, properly distributing those assets, making sure debts are...

09 July

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Savings Bonds – A Hidden Gem in Your Estate?

Posted by Bobby Feisee

in Bobby's Blog

Over $9 billion worth of savings bonds and $200 million in registered Treasury securities have stopped earning interest, but haven't been cashed in by the owners,according to treasurydirect.com. Why is so much money simply in limbo? Well, the truth is that when many people hear the term “savings bonds” they conjure an image of their grandparent giving them a piece of paper for a nominal amount of money and being told to “hold onto this since it may be valuable someday.” Savings bonds are simply not considered “sexy” investments and therefore get tossed aside and forgotten by the purchasers and/or the heirs. Many clients who purchased savings bonds decades ago, may have even forgotten that they purchased the bonds. Understanding How Savings Bonds are Passed On Savings bonds are “nonprobate” assets, which means they are not inherited through the provisions of a Last Will and Testament. In fact, savings bonds are more...

19 May

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3 Common Mistakes Executors Make and How to Avoid Them

Posted by Bobby Feisee

in Bobby's Blog

Many people are suddenly thrust into the position of being the executor of a loved one’s estate, and have no idea what to do or how to best proceed. It can be overwhelming. I want to share with you some common mistakes that I’ve encountered with executors in the hopes that you can learn what not to do. Please note, the concerns below are for people that have not done proper trust based planning. Properly drafted and maintained trust based planning (which we recommend for all of our clients) avoids many of the pitfalls below by allowing your trustees to stay out of the courts and public altogether during the administration of an estate. Mistake #1 – Distributing Too Early [caption width="300" align="alignright"] Courtesy of covenanttrust.com[/caption]Inexperienced executors are prone to make distributions too early and without protecting themselves from liability when that distribution is initiated. When you are an...

29 January

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Bobby’s Article on IRA Beneficiary Designation Options Published in the Journal of Financial Service Professionals

Posted by Bobby Feisee

in News

Bobby Feisee co-authored an article which was published in the January 2015 edition of the Journal of Financial Service Professionals (Vol. 69, Issue 1, pp. 57-62). The article explores how IRA beneficiary designations have been altered in the aftermath of the U.S. Supreme Court's decision in Clark v. Rameker. In a unanimous 9-0 decision, the SCOTUS decided that inherited IRAs are not “retirement funds” within the meaning of federal bankruptcy law. This means they are available to satisfy creditors’ claims. Bobby recommends financial advisers help their clients with re-examining any outright beneficiary designations for their retirement accounts. The goal is to insure the funds in your IRA will remain protected for your beneficiaries. Check out the article here: Counseling Clients on Their IRA Beneficiary Designation Options: The Impact of the Recent U.S. Supreme Court Case, Clark v. Rameker...

15 September

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How to Plan Your Estate When Married to a Noncitizen Spouse

Posted by Bobby Feisee

in Bobby's Blog

If your spouse does not possess U.S. citizenship, estate planning becomes somewhat complicated. A unique set of rules applies for noncitizens to inherit property so you should really take the time to sit down with an experienced estate planning attorney to discuss your options. But take comfort in knowing that noncitizen spouses and loved one can inherit your property. So when you draft your will or name beneficiaries for your retirement accounts, you are free to name your noncitizen spouse as a beneficiary. Here’s the rub - for tax purposes, non-citizens who are permanent U.S. residents are categorized as “resident aliens” and resident aliens are unable to access the unlimited marital deduction privilege that most married couples enjoy, according to marketwatch.com . This means that if your resident alien spouse inherits your estate, it could be subject to a huge estate tax bill (depending on the size of the estate). ...

31 July

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Landmark Supreme Court Decision Exposes Inherited IRAs To Creditors In Bankruptcy

Posted by Bobby Feisee

in Current Events

The U.S. Supreme Court held in Clark v. Rameker that inherited IRAs are not “retirement funds” within the meaning of 11 U.S.C. §522(b)(3)(c), a federal bankruptcy law. This means inherited IRAs are available to satisfy creditors’ claims. How the SCOTUS Reached Its Decision The Court relied upon three factors to differentiate an inherited IRA from a participant-owned IRA. The three factors include: (1) the beneficiary of an inherited IRA cannot make additional contributions to the account, while an IRA owner can, (2) the beneficiary of an inherited IRA must take required minimum distributions from the account regardless of how far away the beneficiary is from actually retiring, while an IRA owner can defer distributions at least until age 70 ½, and (3) the inherited IRA beneficiary can withdraw all funds in the IRA at any time and for any purpose without a penalty, while an IRA owner must generally...

20 March

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Pros and Cons of Revocable Transfer-on-Death Deeds in Virginia

Posted by Bobby Feisee

in Bobby's Blog

If you are contemplating what will happen to your home, or other real property (i.e. land) in Virginia, after you pass on, there is a unique type of deed that you may want to consider for estate planning purposes. It’s called a transfer-on-death deed (a.k.a. beneficiary deed). A transfer-on-death deed allows you to execute a deed that names a beneficiary – could be a relative, spouse or close friend - who will obtain title to the property when you pass away without having to go through probate. Virginia recognizes these types of deeds. In fact, transfer-on-death deeds are codified under under Virginia Code § 64.2-624. The statute states that “an individual may transfer property to one or more beneficiaries effective at the transferor's death by a transfer on death deed.” The statute goes on to state that this type of deed is revocable, even if the deed or another instrument contains...

14 May

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Simultaneous Death Provisions: The Law in the “DMV”

Posted by Bobby Feisee

in Bobby's Blog

In many estate plans, it is quite common for a husband to leave everything to his wife and kids. And, vice versa, a wife routinely decides to leave everything to her husband and kids. But what happens if both the husband and wife die simultaneously? Under the common law, if there was any evidence that one of the deceased individuals survived the other, even by a few seconds, then the estates would be distributed in that order. This led to many bitter inheritance battles in court. So, to address this problem, the Uniform Simultaneous Death Act was passed and applies to the “DMV” (i.e. District of Columbia, Maryland, and Virginia). The Act establishes that if two people die within 120 hours of one another, and there’s no will that expressly addresses this situation, each person is considered to have predeceased the other. This means an individual’s estate will pass down to...