The Pro Se Guardianship Proceeding

I don't want to sound as if I want to restrict access to our courts.  However, there is a trend, at least here in Fairfax County, Virginia, that has me concerned.  That trend is the rise in number of pro se guardianship petitions, or guardianship petitions that are filed without the help of a lawyer.

I understand the reason these petitions get filed without a lawyer.  Usually, there is a well-intentioned family member who just wants to make sure that an older person who appears more and more confused is getting the help they need.  In many cases, resources are tight, and the family member wants to try to avoid spending a lot of money.

Indeed, guardian petitions are costly.  This is one of the reasons why I warn people that they should put a comprehensive estate plan in place.  If drafted properly, a few dollars spent now can avoid thousands of dollars in expense and hassle down the road.  To properly pursue a guardianship petition, you should expect to pay a lawyer somewhere between $1,500 to $2,500, to pay a court-appointed guardian ad litem somewhere between $1,000 to $2,500, court costs of a little under $100, and additional costs such as doctor's fees, surety fees and other expenses

Even though the petitioners appear to be well-intentioned, and may resent the notion that they have to spend thousands of dollars out of their own pockets to pursue a guardianship case in Virginia, there is a reason for it.  A guardianship petition should never be taken lightly.  First, in Virginia, anyone can file a guardianship petition against anyone else.  If successful, the petitioner will be taking away numerous fundamental rights from the potential ward.  This could include the right to make medical decisions, the right to control your finances, the right to drive, and the right to vote.  Given the seriousness of the matter, courts simply cannot grant guardianship petitions on a whim.  They must be supported by evidence, and the potential ward must be given the meaningful right to contest the proceeding.

Those who file guardianship petitions pro se are often surprised to find out how they work in Virginia.  Before a guardian can be appointed, there must be an evaluation by a licensed health care worker who certifies that the person is incapacitated.  When the guardianship petition is filed a lawyer, called a guardian ad litem, is appointed to provide guidance to the court.  The guardian ad litem is required to investigate the matter, interview all of the relevant players, including family members and doctors, review all relevant information, including medical reports and financial records, and give a report to the court on whether a guardian is necessary.  This takes time.  And, that time gets billed.  Petitioners who choose not to hire their own lawyer are often surprised to find out that Virginia law places the cost of all of this on them.

To be certain, if a guardianship petition is granted, it is possible to get the court to order that the costs associated with the petition be borne by the ward, assuming the ward has sufficient funds.  In some cases, if the ward is indigent, the cost of the guardian ad litem is paid by the Commonwealth.  But, petitioners are taking the risk that all of the expenses will come out of their pocket.

Then, there is the case of the contested guardianship.  In most cases, the guardian is appointed through a simple hearing after the guardian ad litem files the report with the court.  But, if the potential ward objects, then there may need to be a hearing where the rules of evidence apply.  In fact, the potential guardian has the right to insist on a jury trial.  All of this adds to the hassle and expense.  Indeed, a contested guardianship case can cost n the tens of thousands of dollars in lawyer's fee, including the fee of the guardian ad litem.

Filing a guardian petition without a lawyer is also unfair to the guardian ad litem.  The guardian ad litem's role is not to be the layer of the petitioner.  It is to represent the best interests of the potential ward.  Yet, when a guardian petition is filed without a lawyer, inevitably legal requirements, such as the need for a doctor's evaluation, are overlooked.  This places the guardian ad litem in the very uncomfortable position.  Should the guardian ad litem help out the petitioner, and in effect do things that the petitioner's counsel would have done?  Or should the guardian ad litem simply recommend rejecting the petition for failing to meet the legal requirements, and foot the petitioner with a bill for his or her services in doing so.

And all of this is why pursuing a guardianship petition without a lawyer is a very bad idea.  Petitioners need to be forewarned on exactly what the process involves, and how much it can cost.  In the end, hiring a lawyer to guide you through the process will save everyone involved in the process time and expense, while protecting the rights of the potential ward.

By:  William J. Kovatch, Jr.
(703) 837-8832
info@kovatchelderlaw.com

Using Trusts and Powers of Attorney in Your Estate Plan

There are various tools that you can use in your estate plan to make sure that your property is handled the way you want.  Two such tools are the trust and the power of attorney.

A trust is a legal arrangement where one person, a trustee, holds and manages property for the benefit of another person, the beneficiary.  Through a trust agreement, the trustee is given instructions on what to do with the property held in trust.  This includes instructions on what to do with the property once the beneficiary has died.

The most common type of trust used in estate plans is the inter vivos, or living, revocable trust.  The owner of the property appoints himself or herself as both the trustee and the beneficiary.  He or she then appoints a successor trustee to take over when the original trustee dies or becomes incapacitated.  The trust includes instructions on what to do with the property upon the owner's death.

Revocable living trusts are commonly used to avoid probate.  That is, by owning your property through a trust, you do not have to file it with the probate division of the court, and go through the expensive and tedious process of probate.  In Virginia, where every estate with more than $50,000 (exclusive of real estate) must go through probate, using a living trust can save your heirs money and hassle after your death.

But, revocable living trusts can have other purposes.  They include assisting an older person who needs hep managing money by appointing a co-trustee to help make financial decisions. 

A power of attorney is a document that appoints a person to make decisions for you.  You appoint an agent, also known as an attorney-in-fact.  Your agent has the power to act as if her or she were you.  That can make it easier for you to have someone do your banking or sign documents in a real estate transaction.  Of course, since the agent can do things on your behalf, you better make sure your agent is a person you trust to act in your best interests.  Powers of attorney can be limited.  An example is a power of attorney to complete a real estate transaction while you are out of town.  Powers of attorney can also be general.  This is where you appoint an agent to do anything you can do.  They should also be durable, meaning that the powers of attorney is effective even when you are incapacitated.

The most common reason to have a power of attorney is to protect your estate from the need to engage in guardianship proceedings.  That is, if you become incapacitated, and you do not have a power of attorney, then in order for someone to take care of your estate for you, that person would have to go through a guardianship proceeding.  Guardianship proceedings are expensive and can be embarrassing.  By contrast, a power of attorney is usually a fairly simple and inexpensive document to create.

I go into more detail on trusts and powers of attorney in this article.

When you are ready to discuss you estate plan, you should contact a knowledgeable attorney to discuss the options available and the advantages and disadvantages of each option.

By:  William J. Kovatch, Jr.
(703) 837-8832
info@kovatchelderlaw.com

A Family with Young Children Should Have a Comprehensive Protection Plan

If you have young children, you should put together your Comprehensive Family Protection Plan.  A will is simply not enough.  You need to ensure that you have appointed a guardian for your children, should you meet your untimely demise, and given instructions to all of your loved ones on how to proceed.

I go into more detail on exactly what you Comprehensive Family Protection Plan should look like in this article.

Make an appointment now so we can discuss how best to protect your family.

By:  William J. Kovatch, Jr.
(703) 837-8832
info@kovatchelderlaw.com

Steps Same-Sex Couples Should Take When They are Legally Unable to Marry

As the debate rages on, a majority of states do not recognize same-sex marriages.  One argument to permit committed homosexual couples to marry has been that such couples are denied some of the same rights that married heterosexual couples have.  If you live in one of the states that do not recognize same-sex marriages, there are steps you and your partner can take to replicate some of those rights.  Here are the documents you need to create:

A Health Care Directive (also known as an advance medical directive, a health care proxy, a health care agent or a living will)

Through a health care directive you appoint whom you want to make medical decisions for you when you cannot.  In Virginia, if you have not appointed a health care agent, and you are unmarried, then the law will first look to your parents to make such decisions for you, and if they are deceased, then to your siblings.  If you do not want that, then you can appoint your partner to make your health care decisions for you through a health care directive.  You can (and should) also give guidance on how you would want your medical decisions made.

A HIPPA Release and Authorization

If you want to make sure that your partner has access to you medical information, then you should execute a HIPPA release and authorization.  This tells your medical service providers that it is OK to speak with your partner about your health care issues.  Otherwise, under HIPPA rules, your doctor will not share information with your partner.

Durable Power of Attorney

Through a power of attorney, you appoint an agent who can act for you (and thus legally bind you) for a host of different things.  When you execute this document, you can give your agent broad powers to act n your behalf, or very narrow powers.  You also want to make sure that the power of attorney is durable, meaning it will be effective even if you are incapacitated.

A Living Trust

Married couples have the benefit of buying real estate as “tenants in the entirety.”  This means that they each own an undivided share of the whole.  One spouse cannot sell his or her share without the authorization of the other.  Creditors of one spouse cannot place a lien on the real property.  Tenants in the entirety also have the right of survivorship, which means that when one spouse dies, the other automatically inherits the property without the need to go through probate.

Same-sex can replicate these rights through a living trust.  The trust can be set up appointing oh partners as co-trustees, and prohibiting one trustee from selling property without the consent of the other.  A trust can also be set-up to protect the property held from the creditors of just one of the partners.  Finally, a trust can ensure that when one partner dies, the property in the trust is passed to the surviving partner, without the need to go through probate.

A Will

Although much can be accomplished through a living trust, you should still have a will to make sure that your property goes to the people you choose.  Without a will, the law of intestacy applies, which means that your blood relatives will likely inherit your property.  If here is some property you do not own through a trust, then a will is essential to ensure that the property goes in accordance with your desires.

Funeral Designation

I Virginia, you can execute a document to appoint a person to be in charge of making your funeral arrangements.  Without such  document, a funeral director may look to your family to make decisions about your funeral instead of your partner.

One word of warning with all of these documents.  Make sure that your partner is trustworthy.  If there are issues of trust in your relationship, then appointing your partner to be the person to make these decisions for you could wind up being disastrous. 

As always, it is best to consult with a lawyer to make sure your arrangements are set up the way you want them to be.

For more information, see "Same Sex Couples Can Take Steps to Replicate Some Rights of Married Heterosexual Couples".


By:  William J. Kovatch, Jr.
(703) 837-8832
info@kovatchelderlaw.com

Administrative Agency Cases Require Special Attention

Many people involved in a case before an administrative agency do themselves a disservice by not hiring a lawyer. They assume that because the procedures are informal, they can just as easily present their case as a lawyer. Even before an administrative agency, however, lawyers are vital.

The most important thing to do before an administrative agency is to make a record. That is the case is decided on the testimony, documents and other information submitted to the agency. This is the record. Often, administrative agency cases involve highly technical subject matter. A person before the agency maybe an expert. But, he or she should not assume everyone else is. Thus, it is vital to submit documentation to back up your case. An experienced lawyer knows how to make a record. Indeed, an experienced lawyer will understand that the case could go to court, where the judge will not be a technical expert. Putting enough evidence on the record to convince a judge is key.

Next, people are often anxious to state their case. But, they may not realize that there words can be misinterpreted. A lawyer can help select the right message and be careful in word selection.

Finally, a good lawyer will research the law and learn how to set up the legal arguments.

So, if you find yourself in a case before an administrative agency, you should invest the resources to find an experienced lawyer to help you.

Planning for Adults with No Children

Recently in my practice, I have noticed something of a trend. That trend is the growing number of older adults who are single, childless and seeking estate planning advice. There are a host of reasons why they are single and childless. Some may have gone through a divorce and never remarried. Some may have been widowed. Some may have focused so much on their careers that they simply never married and had children.

Planning for this set of the population presents some special challenges. The first of such challenges is determining who to choose to serve in various positions of trust, called fiduciaries. Often, when you have a married couple with mature adult children, the couple will look first to the adult children to serve in such positions as executor, trustee or health care agent. When you have an older adult who does not have any children, however, the choice of who shall serve in these positions is not as obvious.

When the single older adult has siblings, often they will think first of appointing a sibling to serve in a position of trust. This, however, can present some special considerations. First, siblings tend to be relatively close in age. Thus, there is a question of whether the sibling will actually pass away first. This could leave the older adult in need of appointing new fiduciaries when their siblings pass away. There is also the risk that once the older adult passes away, the sibling will be unable to take on the role of fiduciary because of factors such as dementia or other health conditions. These problems can be avoided by having the older adult appoint alternative fiduciaries to serve in the event that their first choice either passes away first, or cannot serve for other reasons.

Another potential problem is that siblings may live in different areas of the country. If the sibling must travel a long distance in order to accept an appointment, that may serve as a disincentive to act. In this regard, the older adult should understand that accepting a fiduciary role is voluntary. Even if a person is named in a legal document, that person can still turn down the role.

In some cases, there may be a niece or nephew who is close, in an emotional sense, to the older adult. Such a person may be a better choice, simply because a niece or nephew is likely younger, and thus more likely to outlive the older adult. But, in some cases nieces and nephews may also live quite a distance away from the older adult. Moreover, if the niece or nephew is appointed as an agent to make health care decisions, there could be question of whether that niece of nephew truly knows what the older person would have wanted.

An older adult could look to friends and co-workers. Again, because people tend to associate with others who are close to them in age, this may not alleviate the concern of who will be the first to pass away. Plus, despite friendship, some people may be hesitant to ask someone who is not a relative to take on the burden of administering their estate, or making health care decisions for them.

There may be no simple solution to the dilemma of appointing fiduciaries. At the very least, there should be alternatives named in case the primary choices are unwilling or unable to serve. But, identifying the people who will serve may take some additional time and consideration.

The next issue is exactly what to do with the older adult’s wealth after death. If the older adult has no children, then there will be no obvious choice to inherit that person’s estate. In some situations, the older adult may have done a great job in planning for retirement. He or she may have valuable retirement accounts and investments. He or she may also own real property.

To whom the estate should be left is a very personal question. This may an opportunity for the older adult to leave a legacy, and thus give much of the estate to charity. Perhaps there is a favorite sibling or nephew to whom the older adult would like to leave a gift. Perhaps the older adult has simply not thought about their distribution plan.

What is certain is that if the older adult does not create an estate plan, the state government will create one for them. When a person has not left a will, or placed his or her property in trust, then that is called intestacy. The intestacy laws will then determine who inherits the person’s property. Intestacy laws vary by jurisdiction. But, they tend to favor relatives. Usually, spouse and/or children are the first choice to inherit the estate. If the older adult has no spouse or children, intestacy laws usually look first to see if there is a surviving parent, then brother or sister. In the end, if there is no one to take the estate, then the property will escheat. That means it will belong to the state. If the older adult is not happy with this plan, then it is imperative that he or she think long and hard about how he or she would want his or her property distributed.

The unique challenges presented by single, older adults without children require greater attention and consideration. Consulting with a professional may be helpful, but it may not answer all of the questions. In the end, the choices in creating an estate plan are very personal, and should match a person’s own goals and values.

“Convenience Accounts”: What Are the Risks?

Some people realize that as they get older they may need some help with their finances. Perhaps they want someone they trust to have the ability to pay their bills if something comes up like an extended hospital stay. So, they add the trusted person’s name to their bank account, creating what some people call “convenience accounts.”

But is this really a wise move? In many case, by adding a person’s name to your bank account, you are making that person a joint owner of your account. That means that the person now has all of the rights and privileges you have with that account. The person could withdraw money, and even add another name to the account.

You may think, “Well, I trust this person. She won’t try to steal from me.” But, that is not really the problem. The problem is with the creditors of your new joint-owner.

For example, let’s say your trusted person gets into a car accident. A lawsuit ensues, and your trusted person is found liable. If she does not have enough insurance or assets of her own, the plaintiff from that lawsuit now has every right to attach your bank account to satisfy the judgment.

Adding a person as a joint owner of your bank account simply opens your money up to additional risk. The same goal can be achieved with a very inexpensive document that also avoids the additional risk. That is the power of attorney.

Through a properly drafted power of attorney you appoint a trusted person to be your agent. Your agent can do everything you have the legal right to do, such as draw checks on your checking account. However, all of your assets remain yours, and do not become the joint assets of your agent. This means that your assets can not be used to satisfy the debts of your agent.

Your lawyer can help you create a power of attorney that is right for you, creating powers for your agent that are as broad or as narrow as you want. You should also consult with your bank, as many banks either have their own power of attorney form or their own rules for appointing a power of attorney. A power of attorney can be an important part of your estate planning package.

Avoiding Guardianship Proceedings

Proceedings to appoint a guardian or conservator can very difficult ones. Such proceedings can be costly. The petitioner (the person bringing the lawsuit) may be required to advance to the attorney his or her fees, and, in Virginia, may also be required to advance court costs and the fee for the Guardian ad Litem. While some of these costs may be recoverable from the estate of the ward (the person who needs the guardian) if a guardian is appointed, they remain at risk during the pendency of the proceeding. The petitioner may also need to pay the doctor a fee for preparing a report.

Guardian proceedings are intrusive. The petitioner may be required to air out in public papers and a public hearing those facts that require the appointment of a guardian. This can include evidence of behavior showing that a person has lost the ability to make decisions or engage in activities of daily life without assistance. This can be embarrassing for the family.

For these reasons, if a proceeding to appoint a guardian or conservative can be avoided it should.

Guardianship proceedings can be avoidable with a little planning. If you believe that you may need help in the future with finances and healthcare decisions, and you know somebody you can trust, you can make legal arrangements to appoint another person to make those decisions for you.

Through an advance health care directive (also known as an advance medical directive), for example, you can name a trusted person as your “health care proxy,” and give that person instructions on how you want medical decisions to be made. If you become unable to make the medical decisions for yourself, your health care proxy steps in to make the decisions, based on your guidance.

Another important tool is a power of attorney. With this document, you can appoint an agent who will have the same legal power you have to make decisions regarding your property. The power of attorney can be as broad as you like, or as narrow.

Finally, if you have a complicated financial situation, and foresee the need professional help in managing your assets, you can create a living trust. Through the trust agreement, you can appoint a person to help you manage your property, but still maintain control over that property. You can even use this legal tool as a substitute for a will to avoid probate.

These legal arrangements are far less expensive than a guardianship proceeding. They also have the advantage of keeping your personal matters private.

If you have, or a person you know has, been diagnosed with the condition such as Alzheimer's disease, dementia or certain mental illnesses, it would be beneficial for you to consult with a lawyer now to consider the options and avoid later guardianship proceedings.

The Utility of a Living Trust

If you've even only thought about planning your estate, many people assume that any plan must include a living trust. While I agree that the living trust can be a useful document, I also believe that it is not for everyone. Before you make any decision whether to create a living trust, take into account your individual situation and the advantages and disadvantages of including a living trust in your estate.

What is a living trust? A trust is merely a legal arrangement where one person, called a trustee, holds property for the benefit of someone else, called the beneficiary. A trust can be created by a person through a will, which is called a "testamentary" trust. A trust can also be created while a person is alive, which is called an "inter vivos," or living, trust.

In most instances, when a person creates a living trust, that person becomes both the trustee and the beneficiary. That way, to the outside world, how the property is held appears no different than if no trust were created. But, if a property is included as part of a living trust, the creator can establish rules about how the property is to be distributed after his or her death. That way, the property can pass to someone else without the need to go through probate. Probate is a court proceeding that can tie up an estate for several months before property can be distributed. In Virginia, when a probate estate is opened, a tax is applied based on the value of the property passing through probate.

Avoiding probate is the primary advantage of a living trust, and the reason this type of instrument was created. One thing to consider is that in Virginia, probate can be expensive.  Filings, such as inventories and accountings, can come with filing fees of hundreds of dollars.  That does not include the lawyer's and accountant's fees in drafting up the filings.  However, there are some disadvantages that need to be considered before you decide to make a living trust.

The problem is that owning property through a living trust can be inconvenient. Property needs to be titled through the trust. Checks drafted on accounts held by the trust need to be signed by noting the signatory is the trustee. Thus, the benefit of avoiding probate should be weighed against the inconveniences and costs associated with setting up a living trust.

For example, in Virginia, real estate passes to the next owner upon the filing of the will. Thus, if the bulk of a person's estate is real estate, probate in Virginia can be a simple process. Moreover, for most pieces of property, the probate tax can be less than the price of establishing a living trust.

What, then, are some of the main reasons aside from avoiding probate to have a living trust?

One is to control the distribution of an inheritance to a minor or person who has not reached an age of maturity. Parents of young children, or even young adults, can establish a trust in order to place a responsible person in charge of an inheritance until the child reaches a certain age. For a plan like this, it may even make sense to designate the trust as the beneficiary of any life insurance or other pay-on-death accounts, such as retirement benefits.

Another reason is to have a living trust is to provide for your care if you become unable to manage your affairs because of disability. By naming a person to step in as trustee if you become disabled, you can ensure that someone can have access to your finances and pay your bills. In many instances, banks and other financial institutions are more willing to work with a trustee than a power of attorney.

Finally, creating a living trust can provide assistance to people who need help managing their money. If there is no one in the family or close friends that would be appropriate trustees, by creating a living trust and naming a professional as the co-trustee, you can provide some assurance that the trust will be managed properly.

A living trust is a very flexible document, and can be a useful tool for your estate plan. Whether to create one, and how to structure it are issues you should discuss with an attorney as you consider your own estate.

Do I Need a Special Needs Trust for My Child’s Litigation Award?

Parents of a disabled child may spend long hours fighting insurance companies in a lawsuit. Finally, they may come to a point where an acceptable settlement is offered, or a verdict rendered. This is it, right? This is the end of it?

Perhaps not. Many times, trial attorneys and well-meaning parents caught up in the heat of a lawsuit focus on winning the case, and do not consider how the child will receive health insurance as the child gets older.

A child cannot stay on a parent’s health insurance forever. At some point, a child who has become and adult is no longer eligible for coverage in most employer-provided health insurance policies. If the child is unable to work, then that child will most likely need to rely on public benefits, such as Supplemental Security Income or Medicaid.

These public benefits programs, however, are means tested. That means, a person must only have a minimum amount of income and assets available to them in order to qualify. A large litigation award, if not structured properly, can prevent a child from qualifying for Medicaid.

The answer to this dilemma could be a special needs trust. A special needs trust is a legal arrangement where one person, a trustee, holds and manages some assets for the benefit of another, called the beneficiary. The beneficiary of the special needs trust does not own the assets, and can never direct how the assets are to be used. However, the trust agreement provides that the assets are to be used for the benefit of the disabled child, at the discretion of the trustee. By arranging the assets in this way, they are not “available resources,” and will not disqualify the beneficiary for the public benefits program. But, they do remain available to be used to supplement the beneficiary’s benefits.

Talk to your lawyer to see if a special needs trust is the right solution for you and our disabled child.

Preparing for Probate

It is traumatic enough when a loved one dies. Eventually, however, someone faces the task of wrapping up the affairs of the dearly departed. It can be daunting. There are bills to be paid, property to find, and, if anything is left, heirs to be paid.

How should someone begin? First, forget everything you've ever seen on TV. There is never a time when all of the heirs and people mentioned in the will are brought into a room for a formal reading of the will. Quite frankly, administering an estate will take time. It could be months before anyone really knows where the money is going.

First, you need to see if there is a will. Often, close relatives will know if there is a will and where it is kept. If you know who the decedent's attorney was, the attorney may know. Some people will file their will with the probate court while they are still alive. In some jurisdictions, if you are in possession of someone's will, you are legally obligated to come forward and file it. Failure to do so in the right period of time could result in fines.

You certainly should not wait for the will to be found to make funeral or memorial arrangements. With the time it takes to probate an estate, the will is not the place to put funeral or memorial instructions.

Next, you need to start identifying the decedent's assets. Did he own a house? Does he have a bank account? What other possessions did the decedent have? It may be necessary to safeguard the decedent's property until the administration is complete. If the decedent owns real estate, and no one else will live there, the utility companies should be notified.

Next, it is time to consider whether the decedent left a spouse and/or children. Immediate family will likely be entitled to an allowance from the estate until the administration is complete. This is also the time to consider whether the decedent had any pay on death accounts, such as life insurance or pension benefits. It is also the time to consider whether to file for any survivor's Social Security benefits. The final income tax return may need to be filed.

Whoever is responsible for winding up the decedent's affairs should also try to collect some initial information about the decedent's debts. Once initial information about a decedent's assets and debts have been collected, it may be time to file to open a probate estate. Many jurisdictions charge a probate fee based on the value of the property which will pass through probate. This is why you need at least a good estimate of the decedent's assets and liabilities before filing for probate. Notices will need to be given to the decedent's heirs at law, heirs mentioned in the will, and known creditors. A notice may need to be published in a newspaper.

In some states, if the assets are so few, it may not be necessary to probate the estate. Also, if the decedent's assets were mostly held in pay on death accounts, there may not be enough assets passing through a will or the law of intestacy to open an estate with the probate court.

Once an estate has been opened, the person in charge of winding up the affairs (depending on the circumstances this is the executor or the personal representative) will need to obtain a tax identification number for the estate, and open a bank account for the estate. The decedent's other accounts may need to be transferred to the new account.

The administrator will also have to be familiar with the probate court requirements. Usually, an inventory of the decedent's assets will need to be filed with the court and provided to the heirs and creditors. Later, the administrator will likely need to file accountings to show how the decedent's assets have been managed. The administrator should be sure to keep receipts.

There will usually be some kind of proceeding to determine the claims of any creditors. Once all creditors have been identified, their claims should be examined to determine their validity. Each jurisdiction will likely have in its law a listing of which claims have priority. The claims must be paid in that order. If anything is left over, the administrator may then be required to file an estate tax return and pay any estate or inheritance tax due. Then, the heirs can be paid.

Once all of these steps have been taken, then the administrator can file to close the estate. This an important step. In many states, opening the estate places the tax authorities on notice. The tax authorities will be looking for the estate to be closed to make sure any taxes that are due will be paid.

Probate need not be feared. While it involves a lot of steps, with proper advice and organization, it can go smoothly.

Blended Families Require Special Estate Planning

If you are part of a blended family, then you may need to do some special estate planning to ensure that your personal goals are met.

A blended family is one where either spouse has children from a prior marriage or relationship. Blended families raise estate planning issues because of the need to balance responsibilities to the current spouse, as well as to the children from the prior relationship.

Without special planning, you may find that you goals are not being met.
For example, in Virginia, where a person is married, but has children from a prior relationship, and that person dies without a will, then one-third of the estate passes to the current spouse, and two-thirds are split among all of the decedent’s children. Notice, by the way, that I specifically said “prior relationship,” and not “prior marriage.” That is in recognition that the law protects illegitimate children as much as legitimate children.

This default estate plan, which is called the law of intestacy, may cause some problems for your surviving loved ones. For example, if you have children from a prior marriage, but they are adults, and your current spouse depends on your income and property, the law of intestacy works against your current spouse.

The solution is to carefully think about your family responsibilities and your estate plan goals, talk about them with your spouse, and work with an estate planning attorney to make your goals happen. Here are some tips on how you may be able to achieve your estate planning goals.

Communicate with Your Spouse

The first step is to make sure that you and your spouse are on the same page. Talk openly about your responsibilities to your children from your prior relationship. Talk about your expectations for any children you may have in your current marriage. Talk about what property rights you have, and how you expect to dispose of those rights on your death.

Conclude a Prenuptial or Marital Agreement

Once you and your current spouse (or, ideally your future spouse) have discussed your respective responsibilities, you should come to an understanding concerning your property. Formalize that understanding with a prenuptial agreement (before the wedding) or marital agreement (after the wedding). In Virginia, a marital agreement is just as valid as a prenuptial agreement.

Many people will resist prenuptial agreements with their future spouses. Some view them as merely planning for an eventual divorce. Some of your friends, or even misinformed attorneys may echo that thought.

A prenuptial or marital agreement, however, is not simply planning for an eventual divorce. Rather, it can be a tool to start the conversation about property and expectations. It can be an opportunity to clarify estate planning goals. Formalizing the expectations in a written agreement can avoid confusion and misunderstandings later in the marriage.

For example, if both spouses are coming into a marriage with their own property, it could be that neither spouse would be dependent on the property of the other after one passes away. In such a situation, the spouses may agree to waive any interest in each other’s estate plan, in order to permit the other spouse to address other family responsibilities.

Or, it could be that your spouse is dependent on your income and property. But, to fulfill family obligations, you may want to take care of your spouse for life, and have your property pass to your family upon her death. This can be addressed in a prenuptial or marital agreement.

Put Your Plan into Action

Finally, you need to develop the tools to put your plan into action. The tools could involve a trust to benefit your spouse during her life, but then pass the property to your children on her death. The tools could involve life insurance, and properly structuring the life insurance. These are all issues you should address with your estate planning attorney and other professionals, such as an accountant and financial advisor.

With proper communication and planning, you can balance your family obligations, and manage the expectations of your loved ones.