Estate Planning

Estate planning is generally a process by which a person controls and determines what happens to a person’s property, health and medical decisions, affairs and other assets during life and after death. Issues to consider when formulating Estate Planning Documents include, but are not limited to:

1. Community & Separate Property;
2. Estate Tax Planning;
3. Selection of Fiduciaries;
4. Whether use of Trust mechanisms is appropriate;
5. Children and other heirs;
6. Consideration and coordination of probate and non-probate assets;
7. Co-owned Assets;
8. Future medical decisions; and
9. Overall intent of the Testator
10. Second Marriage or Cohabitation

Last Will & Testament

A legal document, meeting specific statutory requirements, that sets forth the decedent’s desired distribution scheme for his or her separate property and his or her share of community property or tenancy in common property. A Will may also incorporate other directives such as funeral instructions, allocation of estate taxes, disposition of non-probate assets, and restrictions on administration of the estate, etc.

Power of Attorney

A power of attorney is a written instrument by which one person, as Principal, appoints another as his or her Agent and gives the Agent the authority to perform certain specified acts on behalf of the Principal. Such acts may include the authority to make health, medical, financial, and other decisions on behalf of the Principal. The appointed Agent is called the Attorney in Fact. The Agent, or Attorney in Fact, should be somebody in whom the Principal has trust and confidence.

Community Property Agreement

A community property agreement is a legal document which may convert each spouse’s separate property into community property. This document can save time and expense by avoiding the necessity of probate after the first spouse dies. A community property agreement is not a substitute for a Last Will and Testament, Trust, or other testamentary device. Depending on individual circumstances, a Community Property Agreement may not always be appropriate.

Physician’s Directive

A Directive to Physicians (also known as a Living Will) is typically a legal document that provides instructions to an attending physician to, among to other things, withhold or withdraw life support in the event of a terminal condition.

Codicil

A legal document that partially modifies or revokes an existing Last Will and Testament.

Non-Probate Asset

Generally, non-probate asset means those rights and interests of a person having beneficial ownership of an asset that pass on the person’s death under a written instrument or arrangement other than the person’s will. Non-probate assets include, but are not limited to, a right or interest passing under a joint tenancy with right of survivorship, joint bank account with right of survivorship, payable on death or trust bank account, transfer on death security or security account, deed or conveyance if possession has been postponed until the death of the person, trust of which the person is grantor and that becomes effective or irrevocable only upon the person’s death, community property agreement, individual retirement account or bond, or note or other contract the payment or performance of which is affected by the death of the person.

Estate Tax

Under Washington State and Federal law, an estate may be subject to state and federal taxes. The determination of whether an estate liable for any estate taxes is usually based on the value of an estate after assets have been collected and valued, and liabilities have been determined and paid. Specific taxes that must be addressed include the Federal Estate Tax, the Federal Gift Tax, the Federal Generation-Skipping Transfer Tax, and the Washington Estate Tax. Each of these taxes are closely related. Like all taxes, State and Federal tax thresholds are subject to change.

Trust

Generally, a Trust is a legal document wherein a person (grantor) transfers specific property to a trustee to be held for the benefit of specific beneficiaries. Trusts may be either revocable or irrevocable. A Trust is a very flexible tool that may serve a specific purpose. However, depending on the wishes of the grantor, a Trust may be a very complicated legal document creating rights and responsibilities regarding all parties involved. Depending on the form, Trusts may preclude creditors from seizing, or interfering with, assets held for the benefit of a specific beneficiary or may mandate the trust be utilized for a specific purpose, such as to provide for the necessities and well-being of a person. Under Washington State law, a Trust may be effective for up to 150 years. However, a charitable trust created for the benefit of charitable organizations, such as religious organizations, educations institutions or other structured charitable organizations are typically not limited to a duration of 150 years.

Probate

Probate is the legal process by which the affairs of a decedent are settled and ownership of the decedent’s property is transferred to heirs, devisees and legatees. Estate Planning may help reduce unnecessary time and expense of probate.

Personal Representative

A Personal Representative is a general term describing an executor, administrator, special administrator, guardian, limited guardian or special representative. A Personal Representative is generally charged with the responsibility of administering and settling the decedent’s estate pursuant to federal and state law, and pursuant to the direction of the decedent’s Last Will and Testament.

Probate Procedure

If Probate is necessary, then generally the Personal Representative will at least perform the following basic tasks:

1. Request the Court to admit the Decedent’s Last Will and Testament and appoint a Personal Representative;
2. Determine whether the Decedent’s Estate is solvent or insolvent;
3. Give notice to the Decedent’s creditors, if any, and settle and creditor’s claims;
4. Prepare an inventory of the Estate;
5. Determine any federal and/or state tax liability;
6. Distribute the Estate to the beneficiaries and close the Estate

Will Challenge

If a Decedent’s Will was executed under duress, under undue influence, without testamentary capacity, or fraudulently, then an interested party may petition the Court to set aside and invalidate the Will. Generally, commencement of a Will Challenge must be within four months of the Will being admitted to Probate by the Court.