Planning for the future is one of the most meaningful steps you can take to protect your loved ones and preserve your wealth. Many people, however, postpone estate planning as it’s sometimes not high priority given all of the other things going on in our lives.
As Washington estate planning lawyers, we understand.
Estate planning does not need to be daunting. At North City Law, we help craft comprehensive, cost-effective estate plans for clients the ensure their wishes will be respected. Estate plans not only ensure the effective and efficient transfer of assets, but they can also be used to protect families and loved ones in many uncertain conditions.
Whether you are creating an estate plan for the first time or need to revise an existing estate plan, we can help. Once we know your wishes and objectives we create the appropriate documents that will make up your estate plan so that you can feel confident about the future. We invite you to call us at (425) 276-4415 to get started.
What Is Estate Planning?
Most people think estate planning is only about specifying who will inherit assets after death. This is not the case.
Estate planning is a comprehensive approach to managing assets during life, providing for unexpected events that may occur (such as incapacitation or dying with minor children), and ensuring that assets are managed and distributed in accordance with a person’s wishes following their passing. A comprehensive estate plan thus can be used to manage property before and after death, ensure that those who are trusted can make medical and financial decisions if a person becomes incapacitated and cannot make such decisions, and reduce potential fighting among beneficiaries. Comprehensive estate plans can also be used to
What are the Key Components of an Estate Plan?
While the specific documents that are included in an estate plan will vary from person to person depending upon their needs, the documents frequently included in an estate plan include the following:
- Wills. Wills provide how non-trust assets will be distributed upon the death of a testator. Additionally, a will can be used to appoint a personal representative to serve in probate, and to specify guardians in the event that minor children survive the testator. As Washington will lawyers, we can help ensure the transfer of assets held in your name upon your death, and can help you naming a personal representative and guardians for your children (if you should happen to die while they are minors).
- Trusts. Trusts can be used to hold and manage assets during a person’s lifetime, and to specify how assets are to be distributed after death. Trusts can be used to manage property in a wide variety of circumstances (such as charitable trusts or special needs trusts), and they can often be used to distribute property faster than can be done through the probate process. Because trust assets are not usually subject to probate, they additionally provide privacy with respect to the nature and distribution of a person’s assets, and in some cases, trusts can be useful for tax planning and business succession planning. As Washington Trust Attorneys, we can create a trust that will protect your assets and handle your assets distribution objectives.
- Powers of Attorney. A Power of Attorney can be used to name a person to act on behalf of the person creating the power of attorney if he or she becomes disabled during life and is unable to express their wishes for medical or life care or financial decisions. Through a Power of Attorney one or more people can be nominated to serve in such capacities if necessary. Importantly, in the instance of incapacity, Powers of Attorney will automatically become effective, and will not require a court appointment of a Guardian or Conservator, which are expensive, public, and require ongoing reporting to a court.
- Advance Directives. These documents, including healthcare proxies and living wills, outline your medical preferences if you are in an end-of-life situations and cannot communicate your wishes to medical personnel. For instance, if you are in the final stages of life and in a hospital, you can express your wishes for ongoing efforts to prolong your life or that you be given only palliative care.
- Transfer on Death, Deed on Death, Payable on Death, Life Insurance Beneficiary Designations, and Property Owned as Joint Tenants with Right of Survivorship. Accounts and property with these designations are not subject to being transferred by a will. Instead, when a person dies, assets are automatically transferred in accordance with terms of such documents. As result, even if a will provides for an alternate disposition, the documents governing the transfer will govern.
What Documents Will I Need for My Estate Plan?
The specific documents needed for a person’s estate plan will depend upon a number of factors, such as:
- Their estate planning objectives, particularly if they are interested in controlling the distribution of assets after death;
- The size and nature of their estate; and
- Whether they have any specific matters, such as a special needs child or if they wish to create a charitable trust.
As estate planning attorneys, we create estate plans designed to accomplish client objectives in the least costly and most straight-forward way possible.
As an example, some clients may have sizable estates and want to distribute assets to children over time (instead of all at once), and to ensure that assets are potentially protected from the creditors of their children and from their children making poor financial decisions that sometimes can occur with a large sudden inheritance. In this case a trust may be helpful to achieving objectives.
In other cases, clients may have much more modest estates. While such clients may have the same objectives, if the assets likely to be distributed are relatively small, the costs and management of a trust may outweigh the benefits. In this case, a testator may be best served by only having a will instead of a will and trust.
Whether you have a small estate that needs protection or manage a more complex portfolio of assets they may include real estate or a family-owned business, we can work with you to identify your goals and objective and create the best estate plan for you.
How Does an Estate Plan Cost in Washington?
The actual cost of the estate plan will be dependent upon the documents needed and the anticipated time required to draft such documents. The fee will also be impacted by the size and nature of a client’s assets (such as whether a business or rental property portfolio is owned), and how complex the asset distribution wishes are.
Once we meet with you, in most cases we’ll be able to provide you with a flat-fee quote for drafting your plan.
I’m Not Sure How I Want My Assets Distributed?
This is a common sentiment, and one of the top reasons that estate planning is delayed.
Parents may own a vacation home that is desired by all of the children. The parents may also have a business that they want to keep in the family. How will heirlooms be divided? What if a parent wants to disinherit a child?
These are all difficult matters but also matters that we routinely assist clients with. While we cannot make the ultimate decisions for clients in these matters, we can provide a number of solutions that can be considered.
As an example, a vacation home could be transferred to a trust for the benefit of the surviving children. Or it could be sold and the proceeds divided.
A family-owned business may be transferred to those in the next generation who will have direct management in the business. It will be critical to have discussions with those who may inherit (such as the adult children of parents who started the business). In particular, the parents will want to understand matters such as which children are interested in working full time for the business, as in most cases, it will not be ideal to give a business to children in equal shares if not all of them will be continued to be involved in the business.
As Washington business succession lawyers, we help owners determine how best to leave businesses to the next generation considering ownership, tax, and other matters.
Do I Need an Estate Plan? Can’t I Just Tell My Children How I Want My Assets Distributed?
A common question that we are asked is “Do I really need an estate plan – can’t I just tell my children how I want my assets distributed.” Here is why not having an estate plan – particularly one containing at least a will, and perhaps a will and a trust – is not a good idea.
If you die without a will in Washington, all assets owned by you (except for those held in trust or subject to transfer on death provisions) must be transferred in accordance with Washington’s intestacy statutes.
Any verbal directions that you may have given to your children about the transfer of your assets will have no legal effect.
Washington intestacy law provides that people who are all of the same class and relation to the deceased must be given an equal fair market value share of the assets. Stated differently, if a mother dies without a spouse or will and all three of her children are living, all assets must be divided equally among the three children based upon the fair market value of the assets.
This scenario raises several critical questions and problems:
- Who is going to determine what distribution each child receives? In some instances, because of control that a personal representative will have, more than one child may want to serve in this capacity.
- Who gets mom’s ring? Suppose the mother had a ring that is highly coveted by all three children because of the history behind the ring, and that the ring itself has minimal market value. Intestacy statutes do not consider sentimental value (instead, only fair market value is considered in the distributions), nor do they provide for how heirlooms should be distributed.
- What about if Mom told every child that they would receive the ring? This is another common occurrence, especially as older adults sometimes face declining memories. Mom may have told every child that they would inherit the ring, or it’s possible that one child may claim that they were promised the ring when this in fact is not true. In any case, to the extent that a child was promised the special ring, they will undoubtedly be crushed if they do not end up ultimately receiving the ring.
- Who gets Mom’s house? When a person dies intestate and house is included in the mix, this leads to issues similar to the ring, especially if multiple children want to inherit the house, or if some want to inherit the house while others want the house to be sold.
- What should be done with intangible assets, like social media accounts? When a person who is active on social media dies, a need often arises as to who will control those accounts, and how they should be handled.
Don’t Leave a Legacy of Discontent in Your Family
As can be imagined by the scenarios above, dying without a comprehensive estate plan can be problematic. The result in these cases can be battles (including fractured relationships and litigation) among the survivors, and often the need to develop an agreement among beneficiaries to sort out the management and distribution of assets.
These negative consequences can usually be avoided through an estate plan.
Call Us Today to Schedule a Consult
While an estate plan may not be at the top of your list, we often find that clients are hugely relieved once their estate plan is done. Frequently our clients say that they have been putting off estate planning for years and secretly worrying that something might happen to them before their estate plan was finalized.
You can take care of a very important matter and protect your assets and your family by taking the next step. We would very much look forward to meeting you and creating your estate plan.