Estate Planning In Depth

Wills (Revised Code of Washington 11.12)



ESTATE PLANNING PROCESS

The appointment to execute the documents takes 45 minutes to an hour depending upon questions.  If you  make a list of your questions to ask at the appointment rather than emailing them in advance, the process will be much smoother.

If you give me the names of your spouse and children, if applicable, and the names of two people you trust, then I can prepare a draft for review.  Do not be concerned at all if you are not sure or you haven't asked the person if they will do the job.  Those things are completely irrelevant to preparation of the draft and will all be resolved later in the process.

The draft is important because it allows you to read your proposed instructions with then names of proposed administrators to distribute to beneficiaries.  People find seeing their proposed wishes and administrators in writing clarifying of their wishes which is the purpose of estate planning.

Before I went to law school I was a reporter.  I found that one of the best ways to get information was to say something that was close, but just a little bit wrong.  My sources were more than happy to correct me.  The same applies for estate planning.  If you let me prepare a draft, then you will be happy to tell me what is wrong with it.  Where as if I ask you the questions directly, you will be much more hesitant and likely have a lot of questions before answering that will be answered by reading the draft.  I hope that helps.

 14205 SE 36th St Ste 100
Bellevue, WA 98006-1553
www.mulvaneylawoffices.com
Phone: 425-649-1190
Fax: 425-223-3197

chris@mulvaneylawoffices.com
 

 

Transfer on Death Deed

AVOIDING PROBATE ON REAL PROPERTY WITH A TRANSFER ON DEATH DEED

Effective June 12, 2014, Washington State approved legislation (HB 1117) that authorizes transfer on death deeds, which allow an individual owner of real property to automatically transfer the real property to one or more designated beneficiaries upon such owner’s death.

A transfer on death deed is treated as a non-probate asset for Washington estate tax purposes.

Beneficiaries take the property subject to liens, taxes, liabilities, and other encumbrances to which the decedent's Estate is subject.

The transfer of property pursuant to a transfer on death deed will be exempt from Washington real estate transfer taxes provided that a certified copy of the death certificate of the transferor is recorded to perfect title.

A transfer on death deed creates no present interest in the beneficiary to the property and the beneficiary’s creditors cannot make a claim against the property.

During the life of the owner, a transfer on death deed does not affect the owner’s right to transfer or encumber the property. 

HB 1117 Regarding Transfer on Death Deeds.pdf
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 14205 SE 36th St Ste 100
Bellevue, WA 98006-1553
www.mulvaneylawoffices.com
Phone: 425-649-1190
Fax: 425-223-3197

chris@mulvaneylawoffices.com
 

 

Wills In Depth

There are 5 main reasons why everyone needs a Will.

(1)  Wills are not primarily about property, so it doesn't matter if you have assets or not.  Wills are a tangible way to communicate love, and the wish that those you leave behind get along in your absence.  Wills can avoid rifts in families, hurt feelings, anger, resentment and damaged relationships.  By executing your Will, you are making harm to your loved ones less likely, and you are increasing the chances that your family will come together in a positive way to grieve the loss of you and strengthen the bonds among themselves.  Property is only a small (but important) part of what is being administered when a person dies - relationships among survivors are a much more important part. By facing mortality in this tangible way, Wills provide an opportunity to make relationships better, not just after you are gone but right now.  By communicating with your family that you have taken steps to protect and benefit them, you will likely feel better about yourself and those who are most important to you.  People generally don't like signing a Will, but almost everyone likes having signed a Will.

(2)  Your heirs may not agree to waive the bond requirement, which could result in having to post a bond of hundreds or thousands of dollars in order to administer the estate.  This can create stress and arguments because people are generally not at their best after experiencing a loss.Under RCW 11.28.210 "Any person interested may at any time by verified petition to the court, or otherwise, complain of the sufficiency of any bond or sureties thereon, and the court may upon such petition, or upon its own motion, and with or without hearing upon the matter, require the personal representative to give a new, or additional bond, or bonds, and in all such matters the court may act in its discretion and make such orders and citations as to it may seem right and proper in the premises."



(3)  Your heirs may not agree on who should be the personal representative (executor or administrator) of the estate, which could result in costly litigation, and waste or theft of estate property.  This can also create stress and arguments.

(4)  Your heirs may not agree that the personal representative should have nonintervention powers which allow sale and distribution of estate assets without prior approval from the Court.  The absence of these powers increases the cost to probate the estate, and may require hearings on contested motions.  Stress and arguments may result.

(5)  You may have a different preference of beneficiaries than provided for in the Intestacy statute, which could result in your property not being given to those you would wish to have it.  Again, this can not only create stress and arguments, but could also result in family members not speaking to each other for extended periods following your passing. The Washington State Legislature has enacted an Intestacy Statute that determines what happens to your assets after you die if you don't have a Will.  The statute follows your next of kin in the manner in which most people would distribute their estate.  It is still important to have a Will because you may have different wishes, and you may want a particular person to administer the estate.  A great deal of the value of an estate can be consumed in disputes.  This value can make a real difference in the lives of heirs rather than being squandered.  Without a Will, it is easier to steal from your estate because there is a period of time where no one has the authority to act.  During that time, assets can be removed from the estate so that the Personal Representative who does the inventory doesn't even know the assets are missing.  So, while I do not believe that the property distribution is the most important reason to have a Will; it is important.

 By administering estates carefully and properly pursuant to a Will with full communication with and disclosure to all concerned, the administration of the material aspects of an Estate can and should protect and preserve (and possibly even enhance or begin to heal) relationships among the survivors you loved.


For residents of King County, a Will Repository is available.
http://www.kingcounty.gov/courts/Clerk/WillRepository.aspx


What is the Will Repository?

Why use the Will Repository? Family members may be unaware of the existence or location of a decedent’s last will. The Will Repository can help keep your or your family member’s will in a safe, secure place for 100 years. Fee is only $20.00. This will save you the continued expense of a safe deposit box and may save your family the expense of obtaining a court order to access the safe deposit box and/or of having to drill open the box. The costs and process involved when the original will cannot be found can be daunting; securing the original will in the Repository can help avoid this.


 14205 SE 36th St Ste 100
Bellevue, WA 98006-1553
www.mulvaneylawoffices.com
Phone: 425-649-1190
Fax: 425-223-3197

chris@mulvaneylawoffices.com
 

 

Revocable Living Trusts In Depth

Trusts (Revised Code of Washington 11.103)

Why you may need a revocable living trust.

You may also wish to distribute gifts to young people over time (a common age for distribution of gifts to young people is 25) or distribute gifts for the benefit of elderly or vulnerable people who may be disabled or have drug, alcohol, gambling or shopping addiction issues or be in the midst of a divorce or bankruptcy.  A Revocable Living Trust used in conjunction with a Will can accomplish these goals. When you create a Trust, you are the Trustor and the Trustee.  This means that you are giving your assets to yourself to be used for the remainder of your life.  After you pass, your Successor Trustee administers your estate for the benefit of the beneficiaries you name.



As a practical matter, this means that young people who go to expensive schools or remain in school longer, may use their inheritance faster than a child who does not go to college or has a scholarship, but each receives the same amount of money, just at different times according the circumstances.  Sometimes a beneficiary will be quite a bit more affluent than other beneficiaries.  In this case, it is not unusual for the better off beneficiary to disclaim the inheritance so that other beneficiaries receive a larger share. 

There are also circumstances where a beneficiary may be inadvertently disinherited (a Trust makes this less likely).  If that happens I encourage the beneficiary who is legally entitled to the gift to make it right and share with the omitted beneficiaries to preserve family harmony.  A common way that inadvertent disinheritance occurs is a situation where, for example, there are two adult children listed as beneficiaries of a life insurance policy and each has two children of their own.  If an adult child predeceases the parent who owns the policy, then the grandchildren of the predeceased beneficiary would not share in the proceeds because the surviving adult child would receive the whole gift.  If the Trust was named as beneficiary, then the grandchildren would share equally in the predeceased parent's share of the life insurance proceeds.

Trusts can also help avoid the issue of a youthful beneficiary because if a beneficiary is 18 years old, that beneficiary is entitled to whatever share they are given.  The Trust, if named as beneficiary, would allow the Successor Trustee to care for the beneficiary until distributing the balance of the funds at age 25.


Why unmarried couples especially need estate plans.

If you choose not to be legally married, you can contract for some of the same rigthts as married people in a manner that is much easier to change than divorce.  Through your estate planning, you can give your significant other the right to handle financial and medical matters for you.  This can be especially important if your partner is hospitalized and unable to communicate with health care providers.

Separate Property Trusts can be used in conjunction with pre-nuptial agreements to establish rights regarding separate property businesses or inheritance for example. Separate Property Trusts can be used to protect one partner from the other partner's creditors.  Community Property Trusts can be used to contract for many community property rights in a way that protects partners in the event of untimely death, but is easy to amend or revoke if circumstances change. Generally, no probate is necessary for married couples or for couples who hold their real property and the majority of their estate in a Trust.

 14205 SE 36th St Ste 100
Bellevue, WA 98006-1553
www.mulvaneylawoffices.com
Phone: 425-649-1190
Fax: 425-223-3197

chris@mulvaneylawoffices.com
 

 

Powers of Attorney In Depth

Powers of Attorney (Revised Code of Washington 11.94)

Why everyone needs powers of attorney.

      Powers of Attorney apply while you are alive, and die with you.  There are two types: finances and health.  You, as the principal, can appoint an agent for finances and different agents for health care if you wish.  Doing so decreases the possibility of a need for a guardianship proceeding or court intervention regarding your health care. An arrangement in which a person legally appoints another to act on his or her behalf is a principal-agent relationship; the agent should not have a conflict of interest in carrying out acts on behalf of the principal.

FINANCIAL POWER OF ATTORNEY

     A financial power of attorney allows someone you trust (your agent) to handle financial matters for you.  Between spouses, this power is often effective immediately and is a convenience for one spouse to be able to sign for both.  An alternate agent for finances can decrease the likelihood of a contested guardianship proceeding in the even that you are incapacitated for a period of time.





MEDICAL POWER OF ATTORNEY

      A medical power of attorney allows someone you trust (your agent) to communicate with doctors, nurses, and other medical care providers about your care.  It also authorizes your agent to sign consent forms for you when you are unable to do so for yourself, it it is what your agent believes you would want under the circumstances.


      I will register your medical power of attorney for you (along with your living will) through the US Living Will Registry.  http://www.uslivingwillregistry.com/wsj.shtm 
You will receive a card for your wallet with your agent's telephone number on it.  The card will have a code so that your documents can be accessed online.

      Below is a form to complete and bring with you when we meet, so that I can put your health care documents in the Registry for you.

(Active) - US Living Will Registration Form.pdf
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       Also below, is a copy of my card.  Click the link below to access my health care documents.  Enter "US Living Will Registry" as the source; Enter US0000065583 as the Registration Number.  Click on Durable Power of Attorney and Advance Directive to see copies of my documents.

http://liv-will1.uslivingwillregistry.com/LookupDocument.asp

 14205 SE 36th St Ste 100
Bellevue, WA 98006-1553
www.mulvaneylawoffices.com
Phone: 425-649-1190
Fax: 425-223-3197

chris@mulvaneylawoffices.com