People often ask what is
Estate Planning? Estate Planning is
essentially an orderly method by which a
decedent’s assets are distributed
according to the decedent’s
intent. We offer a variety of
documents as tools to achieve your
intent. A summary of these documents
is listed below, but a more in depth
discussion is provided in my “Dear
Client Letter” found by downloading
the estate planning packet shown at the
bottom of this page.
- Simple Will.
For the vast majority of my clients all
they need is a simple Will providing
who the court should appoint as their
personal representative, how the debts
will be paid and provide for distribution
of their remaining estate. If young
children are involved, a Will should
contain a simple trust to manage the
child’s money until a suitable age,
such as age 25.
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2.
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Complex Wills and Trusts are used
by people for a variety of reasons. A trust
can stand alone and be termed a Revocable Living
Trust or be contained within the Will and be
termed a Testamentary Trust. A few
notable reasons for trusts are: Estate tax
reduction by preserving both spouses’
exemption from tax that would double the present
tax exemption of two million dollars for one spouse in the state
of Washington to four million for
two spouses. Federal Estate Taxes are
changing. I have written a
Recent Article on this tax
topic. This strategy is used to benefit the
contingent beneficiary(s) (usually the children),
Special Needs Trusts for incapacitated
individuals on some form of public assistance,
Irrevocable trusts (usually for Life insurance),
spend thrift trusts and whatever purpose your
needs might require.
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3.
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Community Property
Agreement. This is a contract between
married couples that leaves property to the
surviving spouse. This document is not
recommended for all couples, but is a
non-probate transfer of assets document I often
recommend. One still needs a Will for
when the second spouse dies. ** It is necessary
in the State of Washington to designate that a
spouse wants to give his/her half of the
community property and separate property to the
surviving spouse.
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4.
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Some other contractual
arrangements that effect transfer of assets at
death would be some form of beneficiary
designations with Life Insurance Companies,
investment companies, retirement account
custodians, banks and credit union accounts.
Beware that these contractual arrangements will
usually be deemed a priority over the Will if
the distribution is inconsistent. It is very
important to coordinate these contractual
arrangements with your stated intent in your
Will or Trust to avoid misunderstandings with
heirs.
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5.
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There is
a need for a variety of documents during
life to evidence your intent if you are
unable to effectively communicate, such
as:
A.
Having a Durable Power of
Attorney for financial
matters is very important
to prevent a Guardianship to pay your
bills and other such matters if you are
incapacitated.
B. A
Health Care Power of Attorney is
recommended if you are concerned that
you will need someone of your choosing
to direct your health care in your
incapacity. This document is
often times the enforcement tool for
the Directive to Physicians.
C.
Directive to Physicians (Living
Will). This document tells your
health care providers of your desire
concerning end of life
procedures.
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In conclusion I would like you to understand that
this short article cannot take the place of a
conference with an attorney who can give you advice
based upon your situation and needs. For every
general rule presented in this article there could be
many exceptions. The purpose of this article is
to give you a brief overview of this area of law and
to help you gather the needed information and to ask
questions of your attorney. I can guarantee
that you will experience a peace of mind upon
completion of your Estate Planning.
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