Introduction to the Firm
The law firm of Midgett & Preti PC was founded to provide clients and professional colleagues with a law firm focused on estate planning and administration, fiduciary, estate and gift tax planning, elder law, guardianship and conservatorship, family of closely held business law and small business planning. The attorneys of the firm have decades of combined experience in these complex practice areas, which inures to the benefit of the firm's clients and their other advisors. The commitment to excellence in legal representation at Midgett & Preti PC is matched by our dedication to the highest levels of integrity, professionalism and service to our clients.
The laws which influence estate planning techniques range from complex federal tax provisions to state law rules of inheritance, and changes occur with every legislative session and appellate court case on the subject. People of all ages and in every socio-economic group need more than merely competent counsel to protect their interests and to provide sound, effective strategies for dealing with both the laws and the changes.
The law firm of Midgett & Preti PC is committed to maintaining its focus on legal matters falling within the stated, related practice areas in order to provide clients with the informed, experienced counsel our clients have come to expect. Excellence in the law is expected of us. What differentiates us from other law firms is our commitment to:
Unsurpassed client service by engaged and motivated employees in a joyful and pleasant work environment with People of uncompromised integrity, honesty and professionalism who appreciate and promote the balance between work and family.
--------------------------------------------------------------------------------
Basic Estate Planning
No matter the size of the estate, every individual should have a personalized plan for his or her estate. Whether the issue is tax planning, division of assets, appointing an executor, naming guardians for minor children or planning for avoidance of probate, estate planning is the key to ensuring that your priorities are addressed to your satisfaction.
The first step is to establish your goals. You certainly know the concerns which motivated you to plan, and an experienced attorney can assist you with identifying additional issues of which you may not even be aware. Your priorities might include one or more of the following:
- Provide financial protection for your surviving spouse
- Protect inheritance for children from a prior marriage
- Provide for minor children or grandchildren (especially disabled ones)
- Minimize estate and income taxes
- Determine proper beneficiary designations for retirement plans, IRAs and life insurance
- Name guardians for your children
- Keep the business in the family
- Establish trusts for professional management of your assets
- Prevent the unwanted disposition of your assets to certain persons
- Ensure your charitable giving goals are perpetuated
The next step is to determine the most effective estate planning tools for achieving those goals based upon advice of counsel. Your estate plan might include one or more of the following documents:
Will - The foundation of most plans, the Will appoints an executor to carry out your written instructions for the distribution of your probate estate. The Will does not affect assets passing by beneficiary designations on life insurance policies and retirement plans or survivorship provisions on joint accounts. It is often appropriate to establish a trust under your Will to take effect, and be funded, at death for the protection of assets for certain beneficiaries.
Revocable "Living" Trust - An increasingly popular estate planning vehicle, the living trust is a document in which you name yourself as the initial trustee and beneficiary. Assets are re-titled in the name of the trust, enabling your successor trustee to manage those assets in case of your incapacity or death, without court involvement. Thus, the trust tends to reduce the cost and delays of estate settlement, protect your family's privacy and avoid conservatorship proceedings for the court-supervised management of your assets.
Financial Power of Attorney - Everyone needs to have a person legally designated to manage affairs in the event of incapacity, however temporary that condition may be. If you have not established and funded a living trust, the court will need to appoint a person as conservator to manage your resources and report each transaction on an annual accounting - unless you have a durable power of attorney naming your agent for these purposes. Powers of attorney should grant authority to perform a wide range of tasks, and special powers such as gift tax planning, Medicaid planning, real estate transactions and coordination of health care services can also be included.
Health Care Power of Attorney - Distinguished from the financial power of attorney, this document allows another person to make all manner of decisions about your medical treatment if you are deemed physically or mentally unable to give informed consent for yourself. Your agent will be able to authorize or refuse treatment, gain access to medical records, arrange for long term care and a myriad of other tasks on your behalf. Be sure to appoint an alternate agent as well.
"Living Will" - The living will typically sets forth your desire that life-prolonging procedures be withdrawn or withheld in the event that you are diagnosed as being in a terminal condition or persistent vegetative state. You may customize this document to reflect your values or religious beliefs, and you may direct your health care agent to enforce the living will if necessary.
--------------------------------------------------------------------------------
Advanced Estate Planning
Advanced estate planning involves assessing the anticipated estate and income tax liability of an individual or married couple and determining which combination of recognized - or creative - strategies will reduce or eliminate these taxes. Where appropriate, arrangements can be made to provide heirs with funds intended to replace the assets paid over in taxes. The following are some of the more common estate planning vehicles:
Credit Shelter Trusts and Marital Trusts. These trusts are incorporated into a married client's estate planning documents to take effect on the first death, and assets are titled in the name of the individual client or their revocable "living" trust to be sure that they are funded properly. As of January 1, 2007, an individual will be able to shelter up to $2 million (the credit) from estate taxation, while allowing the surviving spouse to have access to the assets in the trust (often called a "family trust" or "bypass trust") until his or her death. The balance of the estate is often held in a marital trust, the terms of which can tend to protect the assets for the children of the first spouse to die (in case of remarriage or spendthrift tendencies of the survivor). These trusts are the foundation of any good estate planning documents where the client's assets exceed the available exclusion amount, or credit, for an individual.
Irrevocable Life Insurance Trusts. Depending upon the size of the estate, it may be most appropriate to make gifts to a trust to pay premiums on a life insurance policy on the life of the taxpayer/client for the benefit of the family. These policies can be purchased on an individual or on the couple (called survivorship, or second to die, policies). The proceeds are not included in the taxable estate of the insured(s), and they can be held in the trust for later generations, as well. They are often used in the estate plans of those who have family businesses or real estate, assets which are not likely to be sold quickly to pay the estate taxes. These trusts also provide the liquidity needed to keep special assets in the family.
Charitable Remainder/Lead Trusts. For clients with appreciated assets they wish to convert and an ability to use a charitable contribution income tax deduction, the charitable remainder trust and charitable lead trust provide an opportunity for significant estate and income tax savings. Typically, the appreciated assets are transferred into an irrevocable trust and sold without capital gains tax liability, and the reinvested assets are used to pay an income stream of a fixed amount or percentage of the trust assets. If the income is paid to the donor or his designated recipient(s), with the remainder passing to charity on death (or the expiration of a period of up to 20 years), the trust is called a charitable remainder trust. In the charitable lead trust, the charity receives the stream of income during the trust term, and the family receives the remaining principal back. Both trusts have significant income, gift and estate tax benefits, and they can be paired with the irrevocable life insurance trust to give the children the value of the asset going to charity, each without taxation.
Personal Residence Trusts. These vehicles are designed to reduce the tax value of the principal residence or vacation home of the taxpayer in order to transfer the property to the children at a significant gift tax discount and to remove the future increases in the value of the residence from the donor's estate. The client(s) still occupy the home for the term of the trust (a period of up to 20 years), as they determine, after which time the title passes to the children, taking the untaxed appreciation from the date of the trust with it as well. The capital gains tax is an issue to be considered, but in most cases, the gift and estate tax advantages far outweigh the income tax implications.
Family Limited Partnerships. The concept of a limited partnership is to give partial interests in an entity to children and grandchildren into which property has been transferred. Because the gift is usually one of a minority interest and has a restricted market for resale, the value of the partnership interest transferred is often discounted for gift, and estate, tax purposes. The transfer is normally structured to take advantage of the available exclusions from the gift tax so that no tax is actually paid during life. Best of all, the parents can retain control of the partnership but not be concerned that the entire value of the assets in the partnership will be taxed as a part of their estates (only the interest not given away will be subject to tax). The process of planning, establishing, valuing and transferring a limited partnership requires commitment, discipline and good advice, but the tax benefits can be significant. In addition, the partnership gives families an excellent vehicle for the orderly transfer of assets, including family business interests, as well as certain creditor protections.
GRATs and GRUTs. Stocks, bonds, mutual funds and other liquid investment assets can be given to family by way of an irrevocable trust using the same general concepts as apply in the case of the personal residence trust. The variations are found in the way the income stream is valued and paid from these trusts, and the rules governing the creation and administration of GRATs and GRUTs are very complex and unforgiving. Thus, experienced tax advice is critical to the success of these vehicles in one's estate plan.
Miscellaneous Planning Tools. Beyond these groups of estate planning entities, there are other strategies and options available for consideration when evaluating an estate for achieving the goals of the clients. There are also non-tax considerations, such as planning for the blended family, protecting assets from litigation, and sheltering funds for the education and support of minors. Non-citizen spouses require special trust arrangements, as do children in tenuous marriages. Business succession agreements can make all the difference between a successful transition to the next generation and litigation among the heirs.
Summary. Experienced counsel can apprise clients of the available options and take the lead in planning and implementing the chosen advanced estate planning strategies. It is also the attorney's goal to bring together the team of advisors for clients to bring the tax, legal, business and financial perspectives to the table for consideration, resulting in a thorough and efficient planning process, to bring the client valuable peace of mind from knowing that one's desires and goals for the family can be achieved.
--------------------------------------------------------------------------------
Estate/Trust Administration
Each of the attorneys at Midgett & Preti PC handles the administration of probate estates, revocable and irrevocable trusts and taxable estates on a daily basis. Executors and administrators seek our counsel to assist them with the process of qualifying as the personal representative for the estate, determining which asset come under their control, obtaining the value of those assets, filing inventories and accountings with the Commissioner of Accounts, preparing individual and fiduciary tax returns and making timely distributions under the estate (whether by will or by statute). There are a myriad of issues which tend to arise, including spousal claims, assets passing outside the will or trust to one family member, sale of real estate, reinvestment of assets and related tax matters, advancements to be charged against a beneficiary, and so on.
The popularity of revocable "living" trusts has certainly affected the number of estates administered under the probate system in
Virginia , but it also means that these trusts must be administered (albeit privately). Many decedents who established living trusts did not fully fund them (in other words, re-title assets into the name of their trust), requiring those assets to be administered through the very probate system they sought to avoid.
Given the number and significance of issues which can (and do) arise in the administration of an estate or trust, no matter how small or large, experienced counsel is advisable for most fiduciaries. Our commitment is to provide timely and accurate guidance to our executor, administrator, trustee and conservator clients so that they may meet their fiduciary obligations to the beneficiaries of the estate or trust which has been entrusted to them.
--------------------------------------------------------------------------------
Fiduciary Litigation
The term, "fiduciary," describes an individual (or entity) to whom the duties and obligations of managing the property or person of another have been granted by a legal instrument or by the courts. For example, a trustee named under a will or a conservator for an incapacitated adult who is appointed by a court are considered "fiduciaries" under the law. One in such a position is said to have a "fiduciary duty" to manage the assets under their control for the beneficiaries, the persons for whom they are holding the assets. The fiduciary standard of conduct is the highest in the law. One who misappropriates trust funds or fails to invest according to minimum legal standards is subject to removal and the imposition of penalties, including forfeiture of fiduciary commissions. Even those acting under powers of attorney are subject to scrutiny and, if necessary, litigation.
Often times, the fiduciary actually commences the litigation. A trustee may seek judicial guidance as to the distribution of a trust. An executor may require aid and direction from the courts to determine the intention of the testator as to provisions in his last will and testament. General litigation matters may involve the estate administrator in his capacity as the personal representative of the deceased. These actions involve special knowledge of the legal status of the fiduciary and the beneficiaries. In addition, the procedural rules and court proceedings involving estates differ from other forms of litigation in
Virginia.
Our attorneys are experienced in the administrative and court proceedings typifying estate litigation. We have served clients who challenged wills and trusts, and we have represented the executors and trustees defending the validity of their respective documents. We have also represented spouses in establishing their claims to the elective share of the augmented estate, preventing complete disinheritance of the surviving spouse. Beneficiaries, including charitable organizations, have retained our attorneys to assist in protecting their interests under contested estate matters as well.
Midgett & Preti PC is a law firm with a practice limited to estate, fiduciary and tax matters. Therefore, when those matters involve litigation, the focus and experience of our attorneys becomes ever more valuable to the success of our clients.
--------------------------------------------------------------------------------
Elder Law
The legal practice area known as "elder law" is a fairly recent response to the burgeoning number of seniors in our society and the anticipation of the graying of following the so-called "age wave." Thanks to the efforts of the health care community and advances in medical science, our life expectancy has improved significantly over the past several decades. As a result, our chances of becoming mentally and physically incapacitated before our demise have increased as well. This circumstance has led to a growing need for legal representation in planning estates, protecting vulnerable seniors from financial exploitation, seeking appointments as conservators and guardians for the elderly, and planning for eligibility for Medicaid while preserving assets for the well spouse and the children.
Attorneys whose practice includes elder law matters are well versed in these issues and are sensitive to the practical problems of representing seniors. Challenging ethical questions can arise in this context, placing a premium on experience and communication skills on the part of the elder law attorney. A competent elder law attorney will know the answers to these ethics issues and advise the clients accordingly.
Federal and state legislation and administrative regulations are constantly changing, making it imperative to seek experienced counsel that maintains an active elder law practice.
Virginia recently reformed our guardianship statutes, and our attorneys not only lectured statewide to attorneys to educate them on these reforms, but they were involved in the task forces and town meetings held to identify the need for change. Clients and attorneys alike seek our assistance in establishing "special needs" trusts, which are asset management trusts designed to provide funds for quality of life for one who is receiving government aid (without requiring that the funds be "spent down" first). Of course, legal advice is sought almost daily about ways to protect assets in the face of impending long term health care expenses for a loved one. Attorney involvement in these matters can range from an office consultation on the available options to active representation before an administrative hearing officer or the courts to determine eligibility for Medicaid and the amount of assets and income to be preserved for the spouse or family.
By limiting our practice to include elder law, we at Midgett & Preti PC aspire to provide our clients with the most current and creative counsel available in this field. We maintain membership in the National Academy of Elder Law Attorneys as one method of achieving these aspirations. We are also involved in serving the community as well. We also lecture to legal and financial professionals regularly on these and related topics, which help them to provide informed service to seniors in our community.
--------------------------------------------------------------------------------
Guardianship and Conservatorship
Each of the attorneys at Midgett & Preti PC handles the representation of incapacitated persons who have been identified as needing either a Guardian to care for their health or living needs or a Conservator to oversee their financial affairs. Our attorneys can file a Petition for the appointment of a Guardian and/or Conservator and all related matters for the appointment of a Guardian or Conservator. We can also serve as the Guardian ad litem (the person who defends the rights and interests of the incapacitated person). The appointment of a Guardian and/or Conservator addresses the following issues to protect the incapacitated person: healthcare issues, preservation of governmental benefits, and protection of assets.
--------------------------------------------------------------------------------
Family or Closely Held Business Law
Each of the attorneys at Midgett & Preti is experienced in handling all aspects of the representation of business clients including the formation of corporations, partnerships and limited liability companies. Our attorneys represent clients in acquisitions and sales of business entities, commercial real estate development, tax planning, contract drafting and negotiations, shareholder and partnership agreements, commercial financing and lease reviews and negotiations.
|
