Estate planning in Washington involves the management and distribution of your real and personal property upon your death or if you should become mentally incapacitated. You may also have documents drafted to ensure the care and financial support of your children and others as well as those containing your wishes regarding life-prolonging measures if you become incapacitated.
Making a Will
A will states your intent on how you want to arrange the distribution of your property on your passing, which can be revoked or modified during your lifetime. If you die intestate, or without a will, the state of Washington will appoint an administrator and distribute your assets according to the state’s succession laws that may not be as you intended.
A will should include the following:
- Property distribution
- Provisions for children
- Executor to administer the estate
- A trust if applicable
Probate is the judicial process that determines your will’s validity, inventories your estate, and transfers the estate’s assets to your heirs once all taxes and debts are paid. Having a will and other planning tools may not avoid probate completely, especially in large estates, but there are ways to dispose of assets during your lifetime to avoid probate, including:
- Revocable Living trusts: A revocable trust holds nearly any kind of asset while allowing you, as trustee, to continue to control your assets. It becomes irrevocable on your death when it is managed by your appointed successor trustee. Trusts can provide marital and creditor protection for your children.
- Joint ownership: With joint ownership of real or personal property, your property has a right of survivorship whereby title automatically pass to the surviving joint owner on your death.
- Payable or transfer-on-death designations: Stocks, bonds, and bank accounts may have a POD, or payable-on-death designation, or a TOD, transfer-on-death designation, that will transfer rights to the accounts upon your death.
- Irrevocable life insurance trust: You can transfer ownership of a life insurance policy to a trust to reduce the value of your estate, but you sacrifice control and cannot change the beneficiary.
- Small estate exemptions: Washington has a small estate affidavit procedure for personal estates valued at $100,000 or less with no real property.
Financial Power of Attorney
This instrument appoints someone to handle your financial affairs. A durable power of attorney means it takes effect immediately and continues if you become incapacitated. You may also limit your agent’s power or designate it as a “springing” durable power of attorney making it effective only upon a physician’s certification of your mental incapacity.
Health Care and End-of-Life Decisions
These documents set out instructions for your health care if you become unable to make decisions for yourself:
- A living will, also known as a health care directive, sets forth your intentions regarding end-of-life health measures.
- A Power of Attorney for Health Care appoints an "attorney in fact" to make critical decisions about your health care when you are mentally incapacitated. It also allows you to opt in favor of life-prolonging care.
Health care directive forms for Washington are available online for a fee or they may be obtained at hospitals or health care facilities. You can modify these by destroying the old one and creating a new one.
Additional Planning Considerations
Most individuals should have some of the above plans for distributing their estates, but there are other considerations:
- Only very large estates valued at $5.25 million for deaths in 2013 are subject to federal estate taxes. Washington imposes an estate tax on estates worth at least $2 million.
- Life insurance can provide a valuable financial cushion if your children, spouse, or other dependents need support in the long term. If you have other sources of benefits like a pension, group life insurance or large IRA, insurance may be an unneeded expense.
- A special needs trust allows the beneficiary to continue receiving governmental benefits. The trustee has the discretion to make distributions to the beneficiary without reducing benefits.
Consult a Washington Estate Planning Attorney
State and federal estate laws are constantly evolving. Consult a Washington estate planning attorney to ensure your assets, and personal medical and financial affairs are managed according to your intentions.