TRUSTS AND ESTATES


At HAUSWIESNER KING LLP we view the estate planning relationship as a lifelong relationship. We listen to the desires of our clients and integrate them into their estate plan. As their needs change we carefully integrate them into their estate plan. As our client's wealth increases we help them arrange their wealth so that it is transferred to the appropriate people or institutions and their estate tax is minimized.

WILLS

Wills are the most common way that people establish their intentions for their property after their death. They can also be a way to share feelings toward their loved ones.  A will makes the probate process simpler and offers the person drafting the will (“testator”) the opportunity to make their wishes for their property known yet most people do not have a will. While it is difficult to contemplate mortality, it is much more peaceful to have planned ahead.

Wills can be simple one page documents or they can be much longer. It depends on the wishes of the testator and the size of the estate. They can offer special instructions about the care of minor children,  pets, charitable giving, and formation of posthumous trusts. For all these examples, the attorneys at HAUSWIESNER KING LLP will make sure that the will complies with applicable Virginia law.

Living Wills

A living will (also called a will to live, advance health directive, or advance health care directive) is a document that expresses a person's desires and preferences about medical treatment in case he or she becomes unable to communicate these instructions during terminal illness or permanent unconsciousness.


Power of Attorney

A power of attorney is a legal instrument that delegates legal authority to another.  It can delegate broad legal authority or limited legal authority.  It allows the person granted the authority (agent) to make property, financial or legal decisions on behalf of the person granting the authority (principal). 

TRUSTS

Trusts are estate-planning tools that can replace or supplement wills, as well as help manage property during life. A trust manages the distribution of a person's property by transferring its benefits and obligations to different people. There are many reasons to create a trust, making this property distribution technique a popular choice for many people when creating an estate plan. The basics of trust creation are fairly simple. To create a trust, the property owner (called the "trustor," "grantor," or "settlor") transfers legal ownership to a person or institution (called the "trustee") to manage that property for the benefit of another person (called the "beneficiary"). The trustee often receives compensation for his or her management role. Trusts create a "fiduciary" relationship running from the trustee to the beneficiary, meaning that the trustee must act solely in the best interests of the beneficiary when dealing with the trust property. If a trustee does not live up to this duty, then the trustee is legally accountable to the beneficiary for any damage to his or her interests. The grantor may act as the trustee himself or herself, and retain ownership instead of transferring the property, but he or she still must act in a fiduciary capacity. A grantor may also name himself or herself as one of the beneficiaries of the trust. In any trust arrangement, however, the trust cannot become effective until the grantor transfers the property to the trustee.

Charitable Trusts

A charitable trust as the name entails is a trust established for charitable purposes.  There are two types of charitable trusts-a charitable lead trust and a charitable remainder trust.  Under a charitable lead trust the charity is entitled to the income of the trust assets and another beneficiary will receive the remainder.  In a charitable remainder trust one beneficiary (often the grantor) will receive the income of the trust and the charity will receive the remainder.  Both charitable trusts can offer positive tax implications in the form of charitable deductions while allowing the grantor to donate to accomplish their charitable intentions. 

Life Insurance Trust

A life insurance trust is an irrevocable, non-amendable trust which is both the owner and beneficiary of one or more life insurance policies.  When the insured dies, the trustee invests the proceeds and administers the trust for one or more beneficiaries.  This has the advantage of avoiding estate taxation.

Special Needs Trust

A special needs trust is created to ensure that beneficiaries who are developmentally disabled or mentally ill can enjoy the use of property which is intended for their benefit.  It also has the added advantage that it allows such persons to qualify for and receive governmental health care benefits, especially long-term nursing care benefits under the Medicaid welfare program. 

Pet Trusts

Historically the law did not allow provisions for the benefit of pets in wills.  Sadly, this often resulted in heirs giving the pet to a rescue organization and keeping the money designated for the pet.  In July 2006 Virginia joined the majority of states in recognizing a trust for the benefit of pets.  These trusts are extremely flexible allowing the drafter to specify activities and treatment of their pets.  It is important to select a good caretaker for the pet in the event of death or incapacity of the owner.  A pet trust can be during life (“inter vivos”) or they can be after death (“testamentary”).  The advantage of the inter vivos trust is the added protection that the pet is cared for in the event of the incapacity of the owner and also during the probate process before the will takes effect.  The attorneys at HAUSWIESNER KING LLP are well versed on Virginia’s new statute and will ask the relevant questions to assure that your pet will be safe and happy in an emergency.

Family Limited Partnerships

A family limited partnership is an effective estate planning tool to minimize estate taxes.  The family puts their assets into a partnership and the parents are both general and limited partners.  Then the parents gift their limited partnership interests over time to their children.  This allows the parents to retain control of their assets but also allows them to give gifts to their children to minimize estate taxes.

Qualified Domestic Trusts

A qualified domestic trust is used to preserve the marital deduction for spouses who are not citizens of the United States.  The marital deduction allows transfers of unlimited amounts of assets between spouses at death.  The benefit is that the surviving spouse does not have to pay any estate taxes when the first spouse dies.  This is a necessity for any non-citizen spouse who is above the applicable exclusion amount (2 million in 2007).

 
ESTATE TAX

Estates are required to file a federal estate tax return if the value of the "gross" estate is above a certain dollar amount (currently $2 million). The gross estate includes the value of all property in which the decedent had an interest at the time of his or her death -- including such items as real estate, stocks and bonds, mortgages, notes and cash, insurance on the decedent's life, and jointly owned property. If spouses own property in joint tenancy, and one dies, one half of the value of the jointly held property is included in the gross estate of the deceased spouse.


GLOBAL WEALTH MANAGEMENT

Our ambition is to serve clients with business interests worldwide. That's why we offer sophisticated estate planning strategies which take into account business interests and real estate located abroad. Many of our clients were able to acquire real estate and businesses in foreign countries which have to be part of an estate planning strategy. HAUSWIESNER KING LLP addresses the need of metro Washington D.C.'s growing immigrant population and addresses their special need with cross-border estate planning strategies. Through our familiarity with foreign legal systems and our extensive global network, we are able to offer Northern Virginia's global community unmatched outbound and inbound estate planning services.

 You can find further information about selected estate planning topics in our Publications section.