WHAT IS ESTATE PLANNING?

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.
 
  1. 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.

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.

3.

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.

4.

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.

Estate Planning
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Estate Planning Packet
 

5.

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. 
 

 

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.