In Washington—and every state—estate planning involves the management and distribution of your property, as well as a plan for who should take care of your property should you become incapacitated and unable to do things for yourself. You might also draft documents to plan for the care and financial support of your children or documents that lay out your wishes for medical care.
Making a Will
Use a will to state how you want to distribute your property when you die. After you make a will, you can revoke or modify it during your lifetime. If you die intestate, or without a will, the state of Washington will appoint an administrator to distribute your assets according to state succession laws (RCW 11.04.015), which give your property to your “closest” relatives. This may not align with your wishes, so it is better to make a will that determines who gets your property.
A will can include provisions for:
- Property distribution
- Guardians for young children and their property
- An executor to administer the estate
- Debt forgiveness
- Instructions about how to pay debts and taxes
- Clear statements of disinheritance, if needed
Probate is the court process that determines your will’s validity, inventories your estate, and transfers the estate’s assets to your beneficiaries after all taxes and debts are paid. Probate can be time consuming, expensive, and – in many cases – unnecessary. There are many ways to keep your property out of probate, but you have to plan ahead. Here are some options:
- Revocable living trusts. Property that passes through a living trust does not go through probate. A revocable trust holds nearly any kind of asset while you, as trustee, continue to control the property. It becomes irrevocable on your death when it is managed by your appointed successor trustee. Trusts can provide protections and asset management for your spouse or children.
- Joint ownership. When you jointly own property “with right of survivorship,” your property passes to the surviving joint owner(s) on your death. This transfer occurs without probate.
- 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.
- Transfer-on death deeds. In many states, you can use a special deed to transfer real estate to a beneficiary when you die, without probate. You can change a transfer-on-death deed anytime during your lifetime.
- Irrevocable life insurance trust. You can transfer ownership of a life insurance policy from yourself, to an irrevocable life insurance trust. This will keep the proceeds from the policy out of probate, but there are limitations (like transfers must occur more than 3 years prior to death) and you sacrifice control of the policy.
- Small estate exemptions: Washington has a small estate affidavit procedure for personal estates valued at $100,000 or less with no real property.
- Community property agreement. In Washington, you and your spouse can avoid probate by making a “community property agreement.”
Financial Power of Attorney
A power of attorney for finances appoints someone to handle your financial affairs. When a power of attorney is “durable” it means it continues to work even if you become incapacitated. You can also make a limited power of attorney (not durable), for specific times or tasks. In all powers of attorney, you can describe the powers you want your “attorney-in-fact” (sometimes called an “agent”) to have and for what period of time.
Health Care and End-of-Life Decisions
As part of your estate plan you can also make health care directives. These documents set out instructions for your health care if you become unable to make decisions for yourself:
- A living will, also known in Washington as a health care directive, describes the kind of health care you want (or don’t want) to receive if you are ever unable to communicate your wishes yourself.
- You can also make a “durable power of attorney for health care” that names an agent to make decisions about your health care on your behalf when you cannot make those decisions yourself.
Health care directive forms for Washington are available online or they may be obtained at hospitals or health care facilities.
Additional Planning Options
Here are some additional things to consider when planning your estate:
- You probably don’t need to worry about estate tax. Only very large estates—those valued at more than $5.45 million for deaths in 2016 are subject to federal estate taxes. Washington State also imposes an estate tax – but only on estates worth at more than $2 million. Both the federal and state exclusions rise with inflation.
- 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, additional insurance may be an unneeded expense.
- A special needs trust can supplement the needs of a person who has a disability, without jeopardizing eligibility for government benefits.
- You might also consider doing some planning around your funeral or memorial. This might include deciding on what your loved ones should do with your body, whether to have a ceremony or celebration, and what you want written about you in a published death notice. It might be difficult to think about these things now, but your loved ones are sure to appreciate your help.
Get Help From a Washington Estate Planning Attorney
With good do-it-yourself products, you may be able to do some estate planning yourself. But for questions, complicated issues, or just to get the peace of mind that comes from working with a professional, get help from a local Washington estate planning attorney.
Questions for Your Attorney:
- Can my spouse and I make a shared living trust?
- Will my estate qualify for the Washington’s small estate probate procedures?
- I made my will fifteen years ago, do I need to make a new one?