ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Monday, February 3, 1997 TAG: 9702040003
SECTION: MONEY PAGE: 6 EDITION: METRO
COLUMN: Money Matters
SOURCE: MAG POFF
Q: Where can I get in touch with someone who knows about lawyers in Virginia?
A: If you need to retain a lawyer, you can call the Lawyers Referral Service in Roanoke at 982-2345. This is a service of the Council of Community Services. If you have trouble reaching this number, which often is busy, you can leave your name with the council at 985-0131.
Lawyers Referral Service polls members of the bar each year about their interest in the program. Those who take part are volunteers who also list their legal fields of special interest. The service tries to match callers with a specialist in the area of expertise needed by the caller.
Lawyers who volunteer for this service must agree to provide each caller with 30 minutes of free consultation to explore the problem.
Another way is to ask recommendations of friends who have experienced similar problems. The telephone directory also lists lawyers by their fields of interest, although there is no true legal specialization in Virginia.
If you are interested in ratings for all lawyers, you can visit the law library in your local courthouse and ask for the listing of lawyers by Martindale-Hubbell. Every lawyer in the United States is listed in these volumes along with some basic information about them. Also, lawyers are rated for competence by their peers.
Figuring taxes on gains from trust
Q: My aunt and uncle established a revocable living trust which owned all of their assets, including investments, except a variable annuity which named the trust as beneficiary.
The cost of the annuity was $36,000. On the date of my uncle's death (my aunt died before he did), the value of the annuity was $56,780.44. By the time it was liquidated, the value was $57,301.95.
Does the trust owe taxes on the entire gain of $21,301.95 or just on the $521.51 gain between the date of death and the date of liquidation?
A: Valerie Kowalski, a certified public accountant with the Roanoke firm of Kowalski & Associates, said the taxable gain would be $521.51.
However, she said, if your uncle's estate required that an estate tax return be filed, the estate may have elected a valuation date of six months after the date of death. In that case, the cost basis of the annuity would be its value six months after the date of your uncle's death.
In such a case, she said, the gain may be larger or smaller than the $521.51, depending on the performance of the annuity during the six months immediately following his date of death.
Parents not required to divide will equally
Q: What is the general thinking among lawyers who write wills about a situation in which there are two children and the parents' estate is not divided equally between them?
One child is well off financially with no obligations, and the other child has obligations to meet far into the future.
First, is it legal? If so, is it done very often?
A: N.A. Ammar Jr., a specialist in wills and estates with the Roanoke law firm of Wetherington, Melchionna, Terry, Day & Ammar, said such a will is perfectly legal. You can divide your estate any way you wish.
And, Ammar said, an uneven split among heirs is not uncommon. Some children do better financially than others, and parents take that into account when they make their bequests. But he said it's a difficult decision for any parent to make.
He said he assumed that the children come from the same marriage and that both of them are mature adults. If so, those factors usually should reduce any friction between the siblings.
He advised you to make sure that you keep your will current in all respects. Don't let the provisions get out of date.
Furthermore, Ammar said, your will should set forth the reasons for your actions. You should state in the document itself the financial reasons for the uneven split. This can also reduce hard feelings.
He recommended that you leave at least something to the more financially successful child. He said you could split your estate 60 percent to 40 percent or even 75 percent to 25 percent, but both children should receive something.
Finally, he said, you should look beyond the next generation before you make a final decision. Will the children of each child be as well off as their cousins?
LENGTH: Medium: 82 linesby CNB