What High-Risk Professionals (and others) Need to Know About Estate Planning

Although no one is immune, certain professionals such as attorneys, physicians, financial advisors, and business owners are much more inherently exposed to lawsuits. Because of this, it is extremely important to have a clear financial and estate plan in place so as not to put yourself or your family at any additional risk. 

It may appear as though occupations such as physicians and attorneys are at a higher risk for medical or legal malpractice respectively, risks that can be addressed, at least in part, by appropriate malpractice or other insurance. What many would be surprised to learn is that these cases are not the biggest threat that they face. They are more at risk from automobile accidents, divorce, poor tax or business planning, or bad investments. 

Insurance and Business Entity Choice

Luckily, you can help to protect your personal and family assets from any threats to your practice by having appropriate professional and personal insurance and by selecting the right business entity for you. Doing so can maximize both your short- and long-term success. 

We mentioned malpractice insurance above for doctors and lawyers. Other professionals can get protection for their business actions by having errors and omissions (E&O) insurance or other professional liability coverage. In addition, business owners should also have substantial umbrella liability coverage on top of significant personal liability insurance. Umbrella insurance is usually very inexpensive and you can get millions of dollars of coverage for a reasonable fee. Insurance companies can offer reasonable rates on this type of insurance since an umbrella policy only pays a claim that is beyond your regular insurance coverage so is in the nature of a low probability but potentially very costly incident. Some umbrella policies will cover business activities and certainly those who own real property that is leased should have a high dollar umbrella policy.

But beyond the essential insurance coverage, many professionals often choose to operate as a sole proprietorship or general partnership (if they are a co-owner). This can be a good choice for some, but offers essentially no protection for claims against personal assets for claims that exceed (or are not covered) by any insurance policies. It is better for for at-risk professionals to create some form of business entity beyond a simple sole proprietorship or partnership. A business entity, if treated like a business and not a personal “piggy bank,” can offer significant additional protection  from liability. The most common protective entities for businesses include corporations, limited liability companies (LLCs), and limited liability partnerships, with LLCs rapidly become the most common form of business entity. 

At Reilly Law, PLC we can work with clients who want to set up an LLC or be a resource to those clients to get them to the right professionals to assist them with their business entity formation.

Can Trusts Provide Protection?

Although the standard Revocable Living Trust we prepare for clients for estate planning purposes does not offer any asset protection as it is simply your alter ego, the process to develop your RLT plan is a great opportunity to examine your situation and explore planning options that may offer some asset protection or at least risk management.

Beyond the risks for our clients themselves, this Peace of Mind Planning process is a time to consider other risks that could have an impact on your financial future and that of your family members. We all have heard horror stories of divorces completely undermining well-thought out financial and estate plans. Similarly there are countless stories of second (or third or later) marriages not having the right kind of planning in place and the unintended consequences and hard feelings that are the result. And not to forget the concerns of many clients of their children getting an inheritance that is lost in a divorce. These “future ex-in-laws” can reap the benefits of your hard earned money. Not many of our clients have ever wanted that result. There are planning tools to help ensure that your intentions are actually followed and appropriate asset protection is in place.

There are some asset-protective tools include a Domestic Asset Protection Trust or a Third Party Settled Spendthrift Trust. If an individual legally transfers his or her assets to one of these trusts, these assets will then be protected should someone bring a claim against the professional or his or her business. However any asset protection trust is at risk of being rendered useless if created too late or not operated in accordance with the applicable law. The best time to create an estate plan is yesterday. The next best time is right now. You cannot wait until you are faced with a lawsuit to start planning. It is important to remember that asset protection is only effective if it is out in place before any threat. 

Reilly Law PLC Helps Clients Who Are Interested in Protecting/Preserving their Assets Through an Estate Plan

You’ve worked hard for the success of your business, your assets, and all that you own. Do not risk having to give it all away. Do something about it. The best way to properly protect your business assets is by consulting with a knowledgeable and experienced Estate Planning Attorney as soon as possible. 

At Reilly Law PLC, we understand the importance of protecting what should be yours. We will help you to create an estate plan that meets your needs and keeps you protected. To learn more or to schedule a free consultation, call Reilly Law PLC at 703-579-1936 today!

Guardianship Considerations for Young Families

If you have young children or are considering starting a family, then you need to familiarize yourself with Virginia’s guardianship process. As responsible parents, you must have a plan in place to protect your children’s best interests should you pass away or become incapacitated. If you don’t choose a guardian for your children, the court will make this decision for you. To get started with the guardianship process, please review the information below and contact Reilly Law as soon as possible to discuss your options. We offer our clients a Guardian Instructions Template that they can customize and address the things that are important to them for their childrens’ futures. Some considerations in selecting your guardian(s) is in the following paragraphs. 

What to look for in a Guardian 

Values  

The guardian you choose should be someone who shares your values, goals, and parenting style. In other words, it is important to choose a guardian who you feel will raise your children like your own. 

Stability

Children need stability, so make sure the guardian you choose is capable of providing your kids with a stable environment. This includes both financial and emotional stability. So this individual must be mature, caring, and capable of taking care of your children’s financial needs. 

Longevity

The person you choose as your children’s guardian must be young enough to care for your children through adulthood. Also, this individual should be in good health. This generally excludes people who are elderly or sickly. By choosing someone who may not be capable of caring for your children until they reach adulthood, you may be setting your children up for future instability. And while physical disabilities don’t necessarily preclude good parenting, it’s imperative to choose an individual who is physically capable of withstanding the rigors of raising children.

Willingness

Although this may be obvious, you must get approval from an individual before naming him or her as your children’s guardian. You should exclude from consideration anyone unwilling or unable to perform the duties of a guardian. 

Character 

Refrain from considering individuals with a bad character when choosing a guardian. Even if someone meets all of the above qualifications, it won’t matter if he or she has poor character, as this will ultimately be damaging for your children. Ultimately a judge will decide if the person or persons you have chosen (or the ones seeking guardianship if you have not made any nominations) will be an appropriate guardian using a best interests of the child(ren) standpoint.

Division of Responsibility

You have the option of naming someone as your prospective guardian to be the caretaker of your children and someone else to be in charge of the financial aspects of your childrens’ lives. This may be a good idea if your caregiver choice is just not good with money or you would rather have a system of checks and balances between the caregiver and the financial custodian.

Contact Reilly Law, PLC to get your Peace of Mind Plan in place  

At Reilly Law, PLC, we are passionate about ensuring that you are legally prepared for all of life’s unexpected events and challenges. Our primary goal is to utilize the estate planning process to provide you with the peace of mind you deserve. Therefore, for young families, we offer a comprehensive and affordable Young Family Peace of Mind Package. With this package, you can rest assured that your loved ones will be well taken care of should anything ever happen to you. If you’d like to provide your family with the security they deserve and begin the young family planning process, please contact us today.

What Same-Sex Couples Should Know About Estate Planning

Estate planning is often confusing for many people. Estate planning for same-sex couples can seem even more complex regardless of whether or not you are married. Luckily, estate planning for same-sex couples doesn’t have to be overwhelming or difficult to understand. As the laws continue to change, it is as important as ever to consult with an experienced estate planning attorney who understands the planning issues for those in the LGBTQ community.

Landmark Supreme Court Case Changes Things

The good news is that most planning issues are the same now for same-sex and non-same-sex couples. Prior to 2015 when the United States Supreme Court upheld the rights of same-sex couples to marry in every state, estate planning for same-sex couples used to prove much more difficult. Now that all 50 states recognize same-sex marriage, they are entitled to the same rights that heterosexual couples have been entitled to and have the same tax benefits (and penalties in some cases) as non-same-sex married couples.

For many couples – and individuals – estate planning is often difficult to think about because it is associated with disease and death. Or as we call it with our clients–the 5 D’s: Disease, Disability, Dementia, Death, and Denial! Of course a client came up with a 6th D–saying it was all very Depressing! However, the best time to plan for your estate was yesterday but the second best is today. We call what we do Peace of Mind Planning because it is smarter to be proactive rather than reactive, and getting your planning done can give you and your loved ones peace of mind.

As I said, the planning issues for married couples is pretty much the same these days whether they are same-sex of not. But the planning for unmarried couples, either in informal relationships or is some type of domestic partnership is very different than married couples. But interestingly, the legal issues for unmarried couples were always very similar regardless of whether the couple was same-sex of heterosexual. It still required having a legally sufficient plan in place to avoid unintended consequences.  

Informal couples or domestic partners run into a lot of issues when it comes to a lack of estate planning documents. You will have no legal authority to access your partner’s health records and will be unable to make decisions regarding their medical care and it may prove difficult to access the distribution of employee benefits when your domestic partner passes. And without a Will or Trust in place naming the partner as a beneficiary, the partner is not covered by the laws of intestacy of any jurisdiction and will be unable to receive any of the deceased partner’s property.  Ordinarily, when an individual passes intestate (without a will), the property will automatically go to certain heirs of the estate (e.g. spouse or children if they have any). But when you are not married, the property will not automatically pass to you and you may experience difficulty establishing standing to open a probate estate for your partner who has passed.

If the surviving partner is named as a life insurance or retirement account beneficiary he or she will receive those benefits but will not be able to make any elections that are available only to a married couple. A plan to address things like that is a key part of a Peace of Mind plan.

Facing the “5 D’s” Without an Estate Plan

The bottom line is, if you are in a same-sex relationship and are not married, you must plan – even minimally – should you desire for your partner to receive any property or benefits. Additionally, you must be sure to nominate someone to make medical decisions for you should you be found legally incapacitated. Don’t think your partner can be that person unless he or she is specifically named in a valid legal document–they will not. Basic estate planning documents include:

  • A Last Will and Testament and/or a Revocable Living Trust
  • Durable Power of Attorney for financial matters
  • Durable Health Care Power of Attorney
  • Living Will/Advance Medical Directive
  •  Do Not Resuscitate Order or Medical Order on Life Sustaining Treatment (MOLST/POLST) [if appropriate]
  • Beneficiary Designations for life insurance policies, annuities, and retirement accounts (401ks/403bs/IRAs/Roth IRAs as well)

The Attorneys at Reilly Law, PLC Help Create Estate Plans for Same-Sex Couples in the Greater Washington DC area.

Although estate planning can appear quite complex, it is extremely important and should not be shied away from. It is best to consult with an estate planning attorney in D.C. who has experience working with individuals in the LGBTQ community. At Reilly Law, PLC, we can help to walk you through the process of estate planning to ensure that you and your loved ones are protected and that your wishes be honored. To learn more or to schedule a free consultation, visit us online or call us at 703-579-1936 today!

My daughter lives in Virginia Beach. My son went to Virginia Tech. I worked at the Washington Navy Yard… Legal Readiness in the Aftermath of Tragedy

This country’s most recent mass shooting last week in Virginia Beach, Virginia struck home with me, but it’s not the first time that’s happened and I’m sure many of you have similar experiences where you have some relation to the tragedy that occurs either because of a mass shooting event like that or natural disaster or other unexpected and tragic occurrence.

My daughter is on active duty with the Navy, living and working in Virginia Beach. While there was very little chance that she was at the municipal building complex during the shooting event, when you hear about something happening in a place where a loved one is living or visiting it still causes your heart to sink and your mind to wonder.

Fortunately she was safe and we were able to communicate with her quickly. Sadly, that wasn’t the case for many other families who lost loved ones or had family and friends with serious injuries from the mass shooting. This wasn’t the first experience our family has had with this kind of event. My son is a graduate of Virginia Tech. He was not there for the mass shooting on the campus, he began his studies there the following year. But by coincidence we were there with him on the Friday before the shooting for his campus visit. Like him, we were very impressed with the campus, the academic programs, and with the students we met. He decided on the spot that Virginia Tech was the school where he wanted to go. Just a few days later we were watching the horror of the scenes of the shooting, seeing the beautiful campus in complete chaos. But we also saw in the aftermath of this horrific tragedy the sense of community at Virginia Tech and it reinforced in my son’s mind that this is the school he wanted to attend. And he did. He is a graduate and a proud Hokie alumnus.

I worked for many years at the Washington Navy Yard. I was not there at the time of the mass shooting at the Navy Yard. I was working in my own practice by then. Of course, it struck home with me as there was a good chance that I’d run into some of those victims during my time there and certainly knew the building where the shooting occurred. I felt obligated to do what I could and I was glad to be able to help in some way in the aftermath.

And there are many more stories like that. We lived in Charleston, South Carolina. We have visited Las Vegas. And the list goes on. But my point here is not to get into the political and moral discussion of gun control or related matters. It’s the aftermath that I am focusing on. It’s the how do we deal with the human part of the tragedy and help the families of the victims. Because in many cases in my experience, certainly at the Navy Yard and elsewhere, many of those victims did not have their legal affairs in order. So in addition to the tragic and unexpected loss of a family member, the families now had to go through the struggle of sorting through financial and legal matters that could easily have been in place and planned for.

While these are extreme examples, they highlight the importance of legal readiness. We don’t anticipate going to work one morning and not coming home because of a mass tragedy. But it could (and sadly) does happen. Or you could have a sudden illness. You could have an accident. These are literally matters of life and death. And that is the point of this article — the aftermath of an unexpected and life changing event. But more importantly, preparing in advance for these life and death matters.

The goal is to be prepared in the unlikely – hopefully — chance that something unfortunate might happen. It does not have to be a tragic shooting. It could be something as simple (and presumably far more likely) as a sudden heart attack, stroke, auto accident, or plane crash that creates the need for legal readiness documents. Having a plan in place means that your family has what they need to handle the various legal and financial matters that arise from a sudden death or incapacity. If you have that plan in place your loved ones will not have the additional stress of dealing with all those matters at the same time they are dealing with the unplanned loss or disability. And again, this does not have to be a mass shooting. Beyond the list above of potential life changing events, like many of you my family has also lived through hurricanes, tornados, blizzards, and other natural disasters that can also cause loss of life or serious injury. Basically it is all of those things that life throws at you. And that is what legal readiness is all about. “Having a plan in place for the just in case.”

We call what we do at Reilly Law, PLC Peace of Mind Planning. And at its core, that’s what Peace of Mind Planning is all about – legal readiness. If you have a Peace of Mind Plan in place, should one of these tragic incidents occur, your loved ones will at least have the comfort that you have things in order and have made a very difficult time a little easier for them. They can focus on their emotional support needs rather than be distracted by legal and financial issues right then. It’s not something that we want to think about, but it’s not something that we could ignore either.

I spent 20+ years as a Navy Judge Advocate and a good reason for doing what I do now were the lessons I learned during my service. We valued the importance of legal readiness for our Sailors and Marines and their families. Even in a peacetime setting the Navy and Marine Corps operates in an environment with dangerous machinery and servicemembers often work in hazardous conditions. There are training accidents.  Pilots and Naval aviators flying off aircraft carrier or smaller ships always have an element of risk even in routine flight. Just because something is called  a training mission does not mean there is no risk of loss or accidents. And, of course, if we get into a wartime situation there is a far greater risk of injury or death.

So we prepared our Sailors and Marines before they went off to their ship or unit. We had even our youngest Sailors getting Powers of Attorney, Healthcare Directives, and Wills. We’d get asked questions about why they had to do this since they really didn’t own much and were not wealthy by any stretch of the imagination. And we would tell them the following in one form or another. “This is not about you. This is about your family. This is a gift you can give your loved ones, your spouse, your children, your parents, and/or your siblings to make it easier for them just in case something happens to you. Because we know that as an 18, 19, 20 year-old Sailor or Marine, you’re indestructible. Nothing bad can happen to you. But the reality is you just never know. Something could happen and if it does, we’ve now helped your family at a very difficult time in their lives because they could focus on what’s important and not on the other things which become a senseless distraction.” And they got it.

This same idea—of being prepared as a gift to our loved ones–applies today to all of us. If we have our legal readiness plan in place and we go to work and tragedy occurs, our families will still have a hard time dealing with our injury or death, but at least they have the essential documents and other things in place to take care of what will be needed at that most difficult of times.

So that that’s the point of this article. It is not about senseless tragedy. It’s not about gun control. It’s not anything directly related to those sad and all too frequent occurrences. It is about what we can do to help with the aftermath. And one of the best things we can do is prepare to make things that much easier for our loved ones at what will undoubtedly be one of the most difficult times in their lives.

As I said, the Virginia Beach tragedy was personal to me, as were so many other horrible events. My family was fortunate. Others were not. A lasting gift we can all give to our families is the peace of mind in knowing that you have things in place for the just in case.

Our informational website at www.MyPeaceOfMindPlan.com provides a no obligation self-assessment of your own legal and financial readiness. We encourage you to visit and learn.

Planning for Your Pet’s Future After You’re Gone

They often sleep in our beds, go for long walks with us, and show us affection after a long, hard day. They may be our pets, but it’s no surprise that today many people consider their pets to be members of the family and treat them accordingly. In our case, my dog Lucy comes to the Reilly Law, PLC office most days and has her own dog bed and routine for her “work day.”

From a legal standpoint our pets are considered to be tangible property in the same way as our car or furniture. Those of us with cats know that our cats would strenuously disagree with this definition–they are not “property” nor are they really “owned” by their humans. Speaking perhaps just for myself here, I get the sense that my cats look at us as staff waiting on them and any legal concepts of ownership are mere trifles. Nevertheless, we should still be planning for their care if we are unable to take care of them.

Although many courts are now looking at pet custody in cases of divorce, their future upon your death remains up to the court – unless you properly plan ahead. In much the same way that parents designate guardians for their children should something happen to them, you should designate a guardian or caretaker for your pet. In order to ensure that your pets are accounted for the way that you’d like if you suffer a disabling illness or injury or after your death, there are two main things that you must do.

Choose a Caretaker

First you must establish who will care for your pets if something happens to you. This may be a direct relative like a spouse or child, or may also be another relative or a friend. Speak with them to ensure that they are on board to assume responsibility. If there is no one in your life whom you feel is the right person for the job, you may want to consider assigning an appropriate charity or humane society. If you wish to have a charity care for your pet post-mortem, it is often a good idea to make a donation to help the charity with care-related expenses.

Put Your Wishes in Writing

The second important part of estate planning for your pet is ensuring that you put your wishes in writing. There are several ways that you are able to do so:

Power of Attorney

You can include direction in a Durable General Financial Power of Attorney (DGPOA) about the temporary or long-term care of your pets. This can include guidance to your Agent on who you want to care for the pets, how they should be compensated, and any special provisions that you have in mind (though often those should be left in a letter or memorandum discussed below). The DGPOA provides your designated Agent with the legal authority to act and the ability to use your funds for the care of your pets. If you are able to resume caring for your pets you can easily do so without any legal formalities.

Will or Trust

To protect the interests of your pets after your death you can choose to put your wishes in your Will or Revocable Living Trust, which can be as easy as a simple statement that you wish to leave your pet(s), who you will identify, to some designated person or persons or charity. You may also wish to leave some money to your designated caretaker (identified by name) for the care of the pets using a Pet Stipend. This will also provide your Executor or Personal Representative some dedicated funds to provide temporary care for your pets until their new forever home can be found. The remaining Stipend funds will then be provided to the new caretakers to help defray their expenses.

Letter/Memorandum

You may instead choose to write a letter or memorandum if you are in a bind for time but need to get something down. This is considered as separate from any Will or Trust you have and its validity will be determined by the specific circumstances. This is also a good place to list any particular care issues such as food preferences, medication, veterinarian choice, etc. All of this will help your Agent or Executor provide the best possible care and outcome for your beloved companion animals.

Pet Trust

The third and final option is to create a Pet Trust, which is a legal document that sets aside an amount of money for the care of your pet after you’ve passed. With a Pet Trust you are able to identify the pet and the caregiver, set aside money, and choose the type of care that your pet will receive.

The Trustee is legally responsible for ensuring that the caretaker is using the money as stated in the Trust. Since there may be a remainder of funds after your pet has passed, you must name a remainder beneficiary. Often a Pet Trust is used for expensive or long living companion animals such as horses, birds, and tortoises.

Reilly Law Can Help

To ensure that your pet is well cared for in the event that something happens to you, it is important to decide which plan you wish to implement. Reilly Law PLC can help you to decide which option is right for you. To learn more or to schedule a free consultation, visit us online or call us at 703-579-1936 today!

What is a Beneficiary Designation?

There is a critical part of estate planning that is not part of the essential legal readiness documents such as Wills, Trusts, and Powers of Attorney. Having accurate and up to date beneficiary designations on certain financial accounts, life insurance policies, and life insurance policies can avoid unintended consequences when someone dies. Many people don’t realize that assets that pass according to a beneficiary designation are not included as part of a Last Will and Testament or Revocable Living Trust which can have a remajor impact on the success of an estate plan. For example, if a Will or a Trust has provisions that delay distributions to beneficiaries until some age milestone, those provisions don’t apply to money that comes from life insurance benefits or retirement accounts that names the beneficiary directly.

Life insurance policies commonly have a beneficiary designation of a spouse, children, grandchildren, or a Trust if the intent is to tie in the life insurance funds with the provisions of a Trust plan. Similarly,  retirement accounts pass according to the beneficiary designation made by the account owner. Generally this is to a named  individual such as a spouse or children, but again, if the intent is to tie in these assets with the goals of the estate plan a Trust can be named as the beneficiary on behalf of the individual beneficiaries.

Benefits of Consulting with an Experienced Estate Planning Attorney

There are many reasons as to why it is smart to consult with a knowledgeable and experienced estate-planning attorney. As previously mentioned, it is imperative that the overall estate plan is coordinated with beneficiary designations so as not to result in the deceased having unintended beneficiaries. Estate planning attorneys are able to accurately review beneficiary designations to ensure that this is the case. We often describe the goal of what we do in our planning process is to, when appropriate, bring together the estate plan with the financial plan which otherwise can be seen as being on parallel tracks that only come together if you intentionally build the connection that makes that happen.

Reilly Law PLC Can Help You with Your Estate Planning Needs

We can work with you to assess whether or not you would benefit from building that connection between your estate planning goals and your assets that pass by beneficiary designations. At Reilly Law PLC, we can help walk you through the various issues surrounding beneficiary designation and estate planning in order to ensure that your wishes can be successfully met. To learn more about beneficiary designations and estate plans or to schedule a free consultation, visit us online or call us at 703-579-1936 today!

Firearms and Estate Planning

When we talk about estate planning, we often discuss the idea of passing our tangible personal property (also known as our “stuff,” or in the minds of many clients, their “treasures!”) to others when we pass away. One thing that we do not often talk about, but is certainly relevant to address in a plan, is whether the client owns any firearms.

Some estate planners treat firearms as they would any other personal property, but the ownership of guns should be specifically addressed in the plan.

Gun Ownership Laws Must Apply to the Beneficiary

You cannot leave your firearm to someone who is not allowed to own a gun or ammunition under the Federal Gun Control Act. This includes individuals who have been found to be mentally incompetent or those who have committed felonies. The Commonwealth of Virginia also prohibits certain mentally incapacitated or legally incompetent individuals, those convicted of specific drug offenses (recent repeated misdemeanors and those under the age of 18.

Nominating a Fiduciary

The individual who has been nominated to serve as Trustee or Executor of an estate that includes a firearm must also meet the restrictions.

Firearms are Subject to Federal (And Sometimes State) Laws

Certain types of firearms are subject to federal and/or state laws. Under certain circumstances, firearms are required to be registered with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). A gun trust is generally the best estate- planning tool for ATF-registered firearms. Under the Brady Handgun Violence Protection Act, certain firearms, such as semi-automatic weapons, are banned all together. Under the Commonwealth of Virginia, unless a firearm is a machine gun, most firearms are not required to be registered.

Firearm Transport

If the beneficiary resides in a different state then that state’s firearm regulations will need to be reviewed before the firearm is delivered to that individual. Since the beneficiary may reside in a different state prior to the owner’s death, it may make more sense to wait until the decedent passes prior to looking at the state’s firearm laws. It is still important however, that the executor researches the gun laws of the beneficiary’s state prior to transferring the firearms. If the fiduciary passes a firearm to an individual that they know may not possess one, they themselves may be found guilty of a felony.

Reilly Law PLC Can Help

If you or a loved one own a firearm, it is important that you account for it in your estate plan. In some cases you might benefit from a special kind of legal document called a “Gun Trust.” We have colleagues in our WealthCounsel network in the area who have a great deal of experience with these types of Trusts and firearms issues in general and we can collaborate with those colleagues or make a referral as appropriate.

Regardless, it is important that you have an estate plan to ensure that your assets go to the intended individuals. Without an estate plan, the process can be long and expensive. If you do not have a plan, or if your plan needs to be updated, it is important to find an estate-planning attorney who understands the intricacies of this type of planning. At Reilly Law PLC, we work with our clients to create plans that accomplish their goals. To learn more or to schedule a free consultation, visit us online or call us at 703-579-1936 today!