Comprehensive Planning. Lifelong Solutions.

Preserving Your Real Property Tax Exemption When Creating Your Estate Plan

by Shannon A. Laymon-Pecoraro, Esq.

February 28, 2014

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Many of our clients are aware that the Commonwealth of Virginia provides exemptions from taxation of property for persons aged sixty-five and older or who are permanently and totally disabled, subject to local income and financial worth limitations.  These exemptions become very important as a result of an individual’s fixed financial position. A recent opinion issued by Kenneth T. Cuccinelli, II, Attorney General for the Commonwealth of Virginia, presents issues related two common estate planning strategies – placement of real property into a trust and a life estate.

Pursuant to the exemption, the real property must be “owned by” a person who occupies the property as his or her sole dwelling and otherwise meets the age or disability and financial requirements. A basic principal in trust law establishes the fact that a trustee holds legal title to the assets of a trust. When real property is placed into a trust, the title to the property is transferred to the trustee, resulting in a disqualification for the tax exemption. On the other hand, a life estate in real property grants a life tenant the exclusive right to use and possess the real property for an indefinite period, which terminates upon death of the life tenant. With this right, the life tenant is liable for the responsibilities associated with property ownership, including real property taxes. Courts have determined that the life tenant has sufficient control over the property to classify the life tenant as the “owner” for tax purposes.  As a result, the tax exemption extends to a life tenant meeting the requirements of the exemption.

Trusts and life estate are only two tools in an estate planner’s handbag. While trusts can serve as a very important tool in minimizing the probate estate of an individual, you and your attorney should discuss the importance of the tax exemption and other possible solutions to meet your estate planning goals.

ask kitkat logoDogs’ Head Shapes

Hook Law Center: Kit Kat, there are a whole lot of different types of dogs from the poodle to the boxer. How do scientists classify their head shapes?

Kit Kat:

Well, they classify them into 3 types. All dogs, it is believed evolved from wolves. However, over the centuries with domestication and the desire for certain characteristics, their head shapes morphed into 3 distinct categories. First, is the dolichocephalic skull which is the type one sees in a grey hound, for example. These dogs have evolved to have excellent sight, and they possess elongated, narrow snouts. Second, is the mesocephalic skull, which is characterized by wider snouts and larger nasal cavities which enhance the sense of smell. In this group of dog are pointers and hounds who are superb hunters and trackers. Third, is the brachycephalic skull, which has a short snout and powerful jaws. In this group are bulldogs, pugs, boxers, and the pit bull. While some in this group may be good guard dogs, others like the bulldog and pug are often plagued with breathing problems. Some airlines are refusing to fly dogs in this category because of health risks, unless special arrangements are made to counteract their weaknesses– like providing a climatic environment which might include air conditioning.

It certainly is interesting to know that all dogs fall within one of these 3 types. Like many other things in nature, dogs continue to evolve. The Westminster Kennel Club has identified 3 new breeds that will be allow to show in 2014–the rat terrier, the Portugese podengo pequeno, and the chinook.

(“From wolf to lap dog,” The Virginian-Pilot, 2-10-14, p. 8)

Upcoming Events

  • United Way of South Hampton Roads is where Shannon Laymon-Pecoraro will be presenting some benefits and strategies for Estate Planning on March 6, 2014. This presentation starts at 6:00pm and the address is,  2515 Walmer Road, Norfolk, VA.
  • Hook Law Center is a sponsor of the American Heart Association Ball which will take place on March 8, 2014 at the Norfolk Botanical Gardens. For event information, contact Stephanie Phipps at 757-628-2608.
  • March 11, 2014 – Shannon Laymon-Pecoraro will be at the Autism Resource Fair to discuss special needs planning at the Virginia Beach Law Enforcement Training Center, 411 Integrity Way, Virginia Beach, Virginia.
  • March 13, 2014 – Andy Hook will be speaking to Parsons Residential Care in Chesapeake regarding Long Term Care Planning, Asset Protection Planning, and Estate Planning at 1005 Deep Creek Blvd, Chesapeake, Virginia.
  • Hook Law Center will be presenting a live webinar on POAs, AMDs and the Ethics of It All in Charlottesville, VA on April 10, 2014. This webinar will be hosted by Virginia Continuing Legal Education.
  • Shannon Laymon-Pecoraro, an attorney at Hook Law Center, is a member of the advisory board of the Hampton Roads Chapter of the American Parkinson Disease Association. Please visit our website if you have any questions about this event on April 12, 2014.

Distribution of This Newsletter

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

This report is not intended as a substitute for legal counsel. While every precaution has been taken to make this report accurate, Hook Law Center assumes no responsibility for errors or omissions, or for damages resulting from the use of the information in this report.

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