When it comes to retirement, surveys of our aging population leave us with one resounding piece of advice:  Don’t underestimate how long you could live.  If you’re lucky enough to retire at age sixty-five, then it might not be unreasonable to expect that you could need to subside on your retirement savings for another thirty years.  A 2015 survey of octogenarians (people in their 80’s) by New York Life found that more than half of participants were not expecting to live as long as they had, leaving them wishing they had saved more money throughout their lives.

Americans are now living much longer lives than our grandparents did.  Our own longevity is increasing, while the longevity of Social Security is in doubt.  The 2015 Social Security Trustee’s annual report projected that the combined trust funds that help pay old age and disability benefits will run out by the year 2034.  That means the funds will dry up by the time today’s 48-year-olds reach full retirement age.

This projection doesn’t mean that retirement payments will stop completely in 2034.  It means that by that time, the funds won’t hold enough money to pay the retirement benefits fully; only about 75% of the benefits will be covered.  So what does that really mean for us?  It means that unless politicians act to adjust the current system, we may not be able to rely on Social Security getting us through our retirement years.  We like to think that Congress will act sooner rather than later to initiate a solution.  But for now, the current precarious position of Social Security forces us to think beyond “Plan A” and onto “Plans B, C and D.”
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Shockingly enough, over half of all American households nearing retirement age have absolutely no retirement savings.  So what provides most of the retirement income for about half of all seniors?  You guessed it:  Social Security.  If aging Americans can’t fully rely on Social Security to provide for us through retirement, then we need to think about financial planning, and the sooner the better.

More and more Americans do not have access to a retirement savings plan at their workplace.  While it’s clear that most of us are far more likely to save for retirement if we can do so out of our paychecks, there are still plenty of ways to save even if our employer doesn’t provide a 401(k) plan.  If you're planning for retirement, consider speaking with a financial adviser about funding an IRA or a Roth IRA.  An IRA, or an Individual Retirement Account, is a type of savings account geared toward retirement that offers a few tax advantages.  With traditional IRAs, you can defer paying income tax on up to $5,500 that you contribute.  Investors over age 50 can defer paying income tax on as much as $6,500.  You can defer to pay income tax while you invest your money in your IRA, but income tax will be due once you withdraw the money from the account.  A Roth IRA is slightly different, in that you do not get a tax deduction on your contributions, but you don’t pay any tax on the earnings and the withdrawals are tax-free when you’re ready to retire.

Another way to ensure you’re saving for retirement is to put aside your tax refunds every year.  Save them in an account promised for retirement.  In fact, by using IRS Form 8888, you can directly deposit your tax refund into a savings account, an investment account or an IRA.

If you have trouble saving your earnings, try setting up a direct deposit.  You can allocate a certain percentage of each of your paychecks to go into your retirement account.  That way, you can save passively and ensure your money is set aside in a safe place.  If you’re wondering how much you should set aside, most financial experts are now recommending saving 15% of your income for retirement.

If you are very close to retirement age already, consider delaying your Social Security benefit.  The older you are when you file for Social Security benefits, the greater your annual payment (up to age 70).
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Once you have your nest egg, no matter how big or how small that egg may be, the most important and urgent next step is to protect it.  Building your savings and failing to protect them is like storing your nest egg on the edge of a brick wall; Humpty Dumpty can fall at any time.  In our elder law practice we've witnessed this happen to many families.  Illness and injury send over half of all older adults into long-term care facilities.  Often, a person admitted into a long-term care facility, such as a nursing home, feels forced to spend down their savings and even sell their house to pay the bills.  With nursing homes costing well over $80,000 per year, it’s no wonder that most families find their savings drained within the first year.  Don’t let this happen to you.  With a little planning, you can protect your savings from the devastating costs of long-term care.  In fact, even if you or your loved one is already admitted into a nursing home, there are still steps you can take to protect whatever savings you have left.  We can help you protect your assets from the costs of long-term care and health crises.  Contact us for a free consultation.

So you’ve decided to buy a house.  That’s great!  Homeownership is a wonderful thing, but you may feel like you need to jump a few hurdles before you can cross the finish line.  Real estate closings can seem complicated, especially if you’re a first-time home buyer, so here’s a checklist of things you’ll need to bring to the big day:
 
1.     Your ID. 

Bring your driver’s license or other form of photo identification.  Some lenders even request a second form of ID such as a passport or a birth certificate.  Your lawyer will let you know what’s required.
 
2.     Funds.

You will need to provide cash for both the down payment and the closing costs.  Your closing attorney will give you the numbers- just be sure to bring a cashier’s check.
 
3.     Your Good Faith Estimate.

Your lender should have provided you a Good Faith Estimate of closing costs during the loan application process.  Make sure the final closing costs match up to what was originally quoted to you.
 
4.     Proof of insurance.

You will need to provide proof that you have established a homeowner’s insurance policy on the property.  Your lender may want to review your policy before closing on the home.
 
5.     Your signature... and your smile.

​Buying a home- from finding a lender to going through the ordeal of closing- can be a stressful experience.  This is the day you finally get the keys.  The house is yours.  Congratulations!
 
At Collins & Hepler, we’re proud of our long history of residential and commercial real estate closings.  In fact, our archive houses over 6,000 real estate files.  We bring experience and personalized service to your home buying process.  If you’re thinking of purchasing a property in Covington, Alleghany County, Bath County, Lexington, Rockbridge County or Buena Vista, contact us for a free consultation.

An LLC, or a Limited Liability Company, is fairly easy and affordable to form in the state of Virginia.  An LLC is a useful entity to form for many reasons.  If you’re starting a business, forming an LLC will offer you legal protection.  As a business owner, you would have limited liability for debts and obligations.  For example, if you own a dance studio and one of your students breaks a leg on a slippery floor, and they decide to sue for medical bill payments, that student would need to sue your business (your LLC) instead of suing you individually.  That way, your LLC would be financially responsible, instead of risking your own personal bank accounts.  Other advantages to forming an LLC include pass-through taxes, which means that you would not be required to file a separate corporate tax return, and enhanced credibility for your business.

The first step in forming an LLC is deciding on a name.  Your name must end with “Limited Liability Company,” or “LLC.”  For example, our fictional dance studio could be called “Dave’s Dance Studio, LLC.”  There are a few prohibited words, however.  You cannot choose a title that could be confused with a state agency, such as “Secret Service” or “IRS.”

Once you’ve decided on a name, you will need to do a name search to make sure it’s available.  The next step is registering your LLC with the State Corporation Commission.  You can do this online or by mail.  Upon registration, you will need to select a Registered Agent for your LLC.  The registered agent can be a person or a business who is responsible for dealing with all the paperwork, receiving the mail and filing annual state taxes for your LLC.  Your registered agent can be someone within the company, including yourself.  Some people choose to name their lawyer as their registered agent, because one of the most important responsibilities of the registered agent is to "accept service of process," or be the one to be served with a lawsuit if the business is sued.  You must file the Articles of Organization and pay a non-refundable fee of $100.

Once you’ve formed your LLC, don’t forget to create an operating agreement.  An operating agreement is not required of an LLC in Virginia, but it’s always a good idea to have clear-cut rules and guidelines for your business.  An operating agreement is a simple legal document that outlines the operating procedures of your company.  If you’re interested in forming an LLC, or if you have already formed an LLC and would like to establish an operating agreement, we can help you draft the professional legal document you need.  Contact us for a free consultation.

Are you a newlywed or did you just get engaged?  Congratulations!  Have you decided to change your last name to match that of your spouse?  Your marriage license is all the proof you’ll need to make the switch.  You’ll also need to update your vital documents and your info with the DMV and the Social Security Administration to make it official.  Here’s how:

1.   Change your name with the Social Security Administration.

Fill out this application for a new social security card.  You’ll need to include a form of ID (such as a driver’s license or a passport), proof of US citizenship (a passport or a birth certificate) and your new marriage certificate.  You can submit these original documents by mail or in person.

2.   Update your driver’s license / ID card.

Take this application for a new driver’s license or ID card to the DMV.  You’ll need to bring your current ID or driver’s license as well as your original marriage certificate.  A new driver’s license will cost $20 and a new ID card will cost $10.

3.   Change your name on your vehicle title / registration.

While you’re at the DMV, after you’ve updated your driver’s license or ID card, you’ll need to apply in person with this application to update your car title.  You’ll need your marriage certificate and your current vehicle title.  There will be a $10 fee.

4.   Update your bank accounts.

Now that you’re married, you may want to change your bank accounts around, anyway.  Maybe you’re considering opening a joint account with your spouse.  In any case, you’ll need to go to your bank in person with your ID and your marriage license to change your name on your accounts.  Be sure to request new checks and debit cards reflecting your name change.  There may be a fee.

5.   Update your voter registration.

This step is pretty simple.  Update your Virginia voter registration information here.

6.   Hire a service to do it all for you.

Don’t feel like waiting in lots of long lines?  Name Change Packages are available through various venders that boast one single application for all these processes.  Read more here.  Packages usually start at around $30.

7.   Tie up loose ends as you go along.

There will probably be a few remaining places where you’ll need to update your information, such as your doctor’s office or your school.  In most of these cases, a simple phone call will suffice.

Granting someone you trust a power of attorney allows that person -- known as your "agent" or "attorney in fact" -- to manage your financial and personal affairs if you are unable to do so.  Your agent is empowered to sign your name and is obligated to be your fiduciary -- meaning they must act in your best financial interest at all times and in accordance with your wishes.

A power of attorney can be made “springing,” which means that it only goes into effect under circumstances that you specify, the most typical being when you become incapacitated.  Often that means your agent cannot act until he or she provides doctors' letters and sometimes court orders to prove you are incapable of making decisions for yourself.

An attorney can help you decide which form makes the best sense for your circumstance. In any case, take care in choosing your agent. That person should be competent, trustworthy, willing to take on the burden of your affairs and financially secure.

If you choose a relative or friend as your agent, you probably won't have to pay them.  But if you name a bank, lawyer or other outside party, you will have to negotiate compensation, which can range from hourly fees to a percentage of your assets paid annually.

Why do you need a power of attorney?

No one is immune from aging or the loss of mental clarity that may come with it. And you're never immune to health crises that may leave you unable to handle the business of your life: paying bills, managing investments or making key financial decisions.

If you become incapacitated without having a power of attorney, the court may appoint a “conservator” to manage your affairs and handle your assets.  This process might cost your family well over $2,000 in attorney’s fees and court costs, not including the cost of the lawyer who will be appointed by the court to represent you during the court proceeding (this lawyer is called the guardian ad litem). 

The person chosen by the court may not be someone you would have picked.  Assigning someone you choose and trust a power of attorney now could save you and your family from heartache later on.

We come across a lot of different types of insurance in our personal injury practice.  Auto insurance coverage comes with so many different options, it can be hard to figure out exactly what it all means. We’re going to explain terms like liability, underinsured motorist protection and comprehensive coverage.  But first, let’s start by taking a look at our state’s requirements.  For Virginia residents, the DMV requires the following minimum coverage:

-Bodily injury/death of one person $25,000
-Bodily injury/death of two or more persons $50,000
-Property damage $20,000

This means that your insurance plan must cover at least $25,000 of the medical or funeral expenses incurred to a driver or passenger in another vehicle if an accident was your fault.  If more than one person is injured or killed, your plan must at least cover $50,000 worth of expenses.  Also, your insurance plan must cover at least $20,000 worth of property damage for others involved in the accident.  For example, if you cause an accident and the driver of another vehicle is injured and their car is totaled, your insurance must cover at least $25,000 worth of their medical expenses and $20,000 worth of damage to their vehicle.  It’s worth noting that if you have only the bare minimum coverage, you may be legally responsible to pay anything above your insurance coverage out-of-pocket.  For instance, if the other driver’s medical bills cost $75,000, your insurance company is required to pay $25,000 but the injured party can sue you to recover the remaining $50,000 of the bill.

Insurance that covers the costs of injuries or property damage to others if you are at fault in an accident is called liability insurance.  The minimum auto insurance requirements in Virginia cover liability.  We should mention that in Virginia, you can choose not to have any insurance at all, but it will cost you a $500 fee every time you renew your registration at the DMV.  We never recommend this option.  It’s much safer and smarter to invest in insurance.

Liability insurance is the minimum coverage required.  If you have liability insurance, it’s probably a good idea to choose liability insurance that’s above the state’s requirements.  For instance, having bodily injury/death of one person set at $50,000 and property damage coverage set at $40,000 offers twice the protection of the mandatory amount.  Bear in mind that medical expenses for serious injuries can easily exceed $50,000, however, so if you can afford it, you may wish to consider limits of $100,000, $300,000, or even more for liability coverage.  The more assets you have to lose, the higher your coverage should be.  This will protect your home and savings in case you’re ever found at fault in a serious accident.

Remember, liability insurance only covers others involved in an accident.  If you just have liability insurance and you cause an accident, damage to your own vehicle and your own medical bills will not be covered.  That’s why it can be a good idea to step up to collision coverage.  Collision coverage pays for the damage to your own car.  If your car has value or is relatively new, collision coverage is usually recommended.  However, if your car is old and doesn’t have much value, then you may want to consider whether the more expensive premium for collision coverage is worth it to you.

Collision coverage pays for damages to your vehicle, but what if you’re injured?  Medical expense coverage is what pays for your medical expenses if you’re hurt.  With this coverage, your own medical bills and the medical bills of any passengers who are riding with you will be paid in the event of an accident.  We highly recommend this kind of coverage as things like hospital bills, ER visits, ambulance rides, and physical therapy can add up to staggering costs, and the cost of medical expense coverage is affordable.

All the coverage we’ve discussed so far comes into effect in the event of an accident.  But what if your car is stolen, or if you hit a deer, or if your car is dinted in a hail storm?  Comprehensive coverage pays for the situations that occur outside of accidents.  Comprehensive coverage can be great if it fits your budget, but if your car doesn’t have much value and is easily replaceable, you may want to consider whether the added expense is worth the price.
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While all states require minimum liability coverage, unfortunately some drivers choose instead to pay the uninsured motorist fee.  Some drivers may carry the minimum coverage, but don’t have the necessary funds to pay for costs that exceed their coverage.  So if someone is legally responsible for the damages that occur in an accident, you might not actually receive all the funds you need.  Uninsured or underinsured motorist protection helps in this type of situation by covering those expenses.  As a small piece of advice, it’s usually not very expensive to add this kind of coverage to your policy (and one day you might be glad you did)!  ​Uninsured or underinsured motorist coverage will pay for your damages and injuries if someone else causes an accident that injures you, and they don’t have insurance, or don’t have enough insurance to cover your injuries.  For instance, let’s say a brand new driver with his first car and only $25,000 in liability coverage runs into you, causing major injuries to you, with your hospital bills in excess of $50,000.  If you have $100,000 in underinsured motorist coverage, you can collect $25,000 from the insurance of the driver at fault, and the remaining $50,000 plus from your own insurance.  

We create estate plans to make sure our family is taken care of.  It’s important to remember that our family includes our pets.  Our furry, feathery and scaly friends depend on us, and our estate plan should provide for their future if we’re no longer available to care for them.

1.     Your pet could live for a long time, even without you.

The average life span of a dog is 13 years, the average life span of a cat is 15 years and certain parrots and turtles can live up to 100 years old!  If you become ill and can no longer take care of them, or if you pass away, your pet could still need care for many years to come.

2.     Promises from friends or family may not stand the test of time.

We can’t predict what will happen in our lives or in our relationships.  Maybe your brother made a promise to take care of Fido a few years back, but he’s since taken a new job and moved across the country.  Maybe he’s moved into a condo that has a strict no-pet policy.  It’s always better to make formal arrangements.

3.     It’s simple to include your pets in your estate plan.

With the help of your lawyer, it’s fairly simple to include pets in your Last Will and Testament or to set up a trust for your pets.  You’ll simply need to decide who to appoint as your Personal Representative to take care of your pets in the event of your death.  Be sure to choose two or three people in case your first choice is unavailable.
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Keep in mind that whoever you choose to take care of your pets does not need to take them in permanently.  They can agree instead to act as a temporary caregiver until they find your pet a good permanent home.

It’s very important that a client feels safe in confiding in their lawyer.  Someone who seeks advice or guidance from a lawyer has the right to do so completely free of any fear that their secrets will be revealed.  Attorneys abide by strict rules of ethics, and that includes the principle of confidentiality.

What does attorney-client privilege mean exactly?  It means that when you seek legal advice of any kind from an attorney, that attorney is forbidden from communicating to anyone what you tell them in confidence.  So even if you tell your lawyer where a body is buried, they are legally and ethically bound to keep that a secret.

In this case, it can seem like the ethics are backwards.  If a lawyer knows something important to a criminal investigation, shouldn’t they tell the police immediately?  Many lawyers find themselves in this very difficult position.  But revealing a client’s secrets would break the important bond of trust that is necessary to provide fair legal counsel to everyone.

Ethically, lawyers know they must keep their client’s confessions under lock and key, much like a priest knows they must keep their parishioner’s confessions under lock and key.  Also, if a lawyer were to give up a client’s secrets they would face severe disciplinary action, including having their law license revoked.

Since you take no risk in doing so, you should tell your lawyer everything.  Telling your legal counsel the whole story will help them provide you with the most accurate professional advice and proceed in the best way without being blindsided in the courtroom with a fact that you failed to mention.
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Going to a lawyer is like going to a doctor.  You wouldn’t omit a fact from your doctor because it embarrassed you.  Your doctor needs to know everything that’s going on, so they can treat you accordingly.  The same goes for your lawyer.  You can trust your lawyer.  You risk more in telling them too little than in telling them too much.

A Last Will & Testament is one of the most important and vital documents one can have.  But why is it so important?

To start with, a will lets you decide who will inherit from you.  If you die without a will, the state will decide who receives your property and life savings.  This happens by statute, without regard to your wishes or your family’s needs.  A will allows you to decide who gets special family heirlooms, such as rings, china, or guns.  Without a will, your family may feud over these items, or fight over who gets to be the administrator of the estate, the person who will make such decisions.  Relatives battling over your possessions can weaken what may have otherwise been a strong family.
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A will allows you to leave money to your church or a charity.  It allows you control over the distribution of your real estate and it allows you to leave a life estate to your spouse or child, or to place conditions upon the use of your land.  A will allows for a smooth transition of your family business to the persons of your choice, in whatever manner you decide. 

Wills are especially important for families with stepchildren, as the laws of the state often will not reflect the wishes of the parents in such situations. The laws of the state will also not provide for your partner if you are not married.

Your will can state who you wish to be the guardian or guardians of your minor children or grandchildren.  If you don’t decide, the courts will.  This is particularly important if you want a specific family member or friend to take care of your children or grandchildren, but that person is not your next of kin.  It’s best to designate that person specifically in a will. Otherwise, the state might give custody to a relative who you may not approve of.

You can use your will to specify your wishes regarding burial, cremation, or memorial services.  Your will can help avoid family squabbles or “guilt buying” at the funeral home.  (It’s important to note that your will is often not read until after the funeral, so it is a good idea to advise your loved ones that you have specified your wishes in your will).

What if you don’t own anything and you don’t have any savings?

Suppose you die in a car wreck caused by a drunk driver.  Even if you have no property or savings, your estate might have a wrongful death claim worth a great deal of money, which will be distributed by the laws of the state if you have no will.  In other words, if you die in an accident, your family could be entitled to money because of it, and having a will in place will decide who that money goes to.

We can't avoid death, but having a will can help ease the burden on our loved ones.  Leaving a will for our loved ones to follow could help ease their stress and worry through a difficult time.