Talking Tradition: Estate Planning Conversations With Family During the Holidays

By Monica Cary on Wednesday, November 26, 2014

The holidays can be a prime time to discuss estate planning issue because everyone is gathered together, often from various parts of the country or world. While the holidays can be difficult, there is a collective intention of general good will, and the holidays are traditionally a time of handing down traditions.

So talking about your end of life wishes during Thanksgiving and Christmas may make natural sense for your family. It’s a great way to take advantage of the fact that everyone’s in once place, together, and provides a good framework for what otherwise might be an awkward conversation. And, if you have survived the death of a loved one, then you can probably appreciate that sharing your personal wishes with your family before your death can be an expression of gratitude for those who survive you.

Before hiring an estate planning attorney, it may be a good idea to talk with family members to get a feel for what some of the family issues might be. It’s also helpful to have relaxed discussions with family before more serious discussions come up while you are ill or closer to death. This way the family will be more emotionally prepared to help carry out your wishes regarding what is to happen if major illness strikes you.

Once you’ve been able to do that, then it’s time to make an appointment with an attorney and set up appropriate estate planning mechanisms. Having these conversations in advance of your first meeting with an estate planning attorney will set the groundwork for any other conversations you need to have with your loves ones. And, it will probably streamline the preparation of your documents and save you some attorneys’ fees.

That said, not all family dynamics are the same. Talking through this with your family may feel scary. And, in some cases, the holidays may not the best time to have these conversations. The team at DuBois CaryLaw Group handles a variety of family law issues. We realize that estate planning, like prenups and even divorce, is often a very delicate topic. We are here to help. Sometimes, consulting with an estate planning attorney before talking with your family can be useful. You can use the estate planning attorney as a coach who can provide you with tips about how to start these conversations and what they might cover.

If you’d like to speak with an estate planning attorney today, please feel free to contact our offices in Seattle (206) 547-1486 or Bellevue (425) 279-7863. We will gladly schedule an appointment for you with partner Monica Cary, who handles wills and estate planning for clients at our firm.

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The Advantages and Disadvantages of Revocable Living Trusts

By Monica Cary on Monday, March 10, 2014

Have you ever wondered by people decide to get revocable living trusts? Seattle divorce and estate planning lawyer Monica Cary, partner at DuBois Cary Law Group, spells out the pros and cons for you.

Advantages

Avoids Probate: When your assets don’t go through probate, they pass more quickly to your heirs and beneficiaries and they are not diminished by the costs of probate.

Flexibility: A living trust is flexible in that it can and should be changed to meet any changing circumstances in your life.

Estate Tax Reduction: Estate tax savings may be available for married couples by taking full advantage of each spouse’s unified tax credit in the living trust. This option is also available in a Will.

Privacy: A major advantage of a living trust is that the details of the trust remain completely private. Neither the assets nor the beneficiaries become a matter of public record. The only people beside you who should know the details of your trust are the trustees and the beneficiaries.

Control: Perhaps the most appealing aspect of a trust is that you have complete control over managing your assets while you are still alive. You can manage them yourself or hire others to manage them on your behalf. In a living trust, your instructions govern how your assets are managed, whereas in a will, the courts may impose restrictions on how your personal representative (also called an executor) manages and distributes your assets.

Orderliness: With the majority of your assets in one location, your trust, your family may have an easier time locating and identifying your assets after your death.

Contestability: It is harder for a disgruntled heir to contest a living trust than a will.

Disability: If you should become disabled through a stroke, senility or some other form of mental incompetence, you avoid a court-appointed guardian if you have a revocable living trust. With a trust, one of your trustees can step in to manage your affairs until you recover. With a will, the person the court appoints to manage your affairs may not be the person you would choose. In addition, the process of appointing a guardian is both lengthy and costly.

Out-of-State Properties: A living trust is valid in all states so if you move, you don’t need to change it to comply with new state laws. In addition, any property owned in more than one state avoids probate. With only a will, you would have to start probate in every state in which you owned property.

Continuation of Business: When you transfer your assets of a business into a living trust, a trustee can step in and continue to manage the business, which is often a needed source of income for the family should you become disabled or upon your death. There is no disruption in operation.

Disadvantages

No Income Tax Savings: A living trust neither avoids nor saves any taxes while you are alive. You will be taxed on all the income the trust earns. During your life, you will file these taxes as part of your personal tax return. After you die, the trust will pay taxes as its own entity on any income to the trust over $600 and generally at a higher rate than you paid as an individual.

No Automatic Estate Tax Savings: Should your estate exceed the value of the unified credit ($1 million in 2002), you will owe federal estate taxes on both probate and non-probate assets. If this describes your situation, you may want to consult a tax professional to discuss reducing your tax liability.

More Complex and Expensive Than a Will: A lawyer will charge you more to create a living trust than a will (about $3000 vs. $750) so it is initially more costly to set up. Trust “funding”, the process by which your assets are transferred into the trust, can be time consuming if you take care of this step yourself.

No Deadline of Claims for Creditors: Probate imposes a limit on the time that creditors may presents bills to your executor while a trust does not fall under the same guidelines. Thus a possibility exists that a creditor could sue a trust or its beneficiaries for money after your death, even after the trust ends.

Does Not Avoid Creditor Claims During Your Life: If you maintain control over your assets in a trust, the courts could force you to pay your creditors with assets from your trust. If you set up a trust to avoid paying creditors, the courts will consider the transfer of assets fraudulent and you could incur a fine in addition to having to pay the creditor.

May Not Eliminate the Need For a Will: If you had any last minute assets that were not transferred to your trust, these assets would need a “Pour-Over Will” to provide for transferring them to the trust. The Pour-Over Will would be filed with the court upon your death, like a standard Will.

If you would like to speak with Monica about your will and estate planning needs, please call (206) 547-1486 or email monica@duboislaw.net

DuBois Cary Law Group, PLLC
927 N. Northlake Way
Suite 210
Seattle WA 98103

(206) 547-1486

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Probate Tips So Your Loved Ones Won’t Suffer

By Monica Cary on Monday, November 11, 2013

What is Probate?

Probate is the court process that legally transfers your assets to other places after you die. If you die with a Will, the Will is administered through Probate. If you die without a Will, your assets will go to your closest relatives, but the process will include a date with the courts. If you want to make the whole experience smoother for your loved ones, take the necessary steps now, while you’re still alive, to hire an estate planning attorney to get a proper Will drafted and signed.

How can I make the Probate process easier for my loved ones who will survive me?

Be specific about emotional items. If you have family heirlooms or items that are likely to have a great deal of emotional value to your loved ones, take the time now to decide how you would like your items distributed. If you can, write a note to each of your loved ones separately. Choose a big-picture person. In your Will, you’ll appoint a Personal Representative.

Your Personal Representative is the one who will be in charge of determining what assets you have, what debts your estate needs to pay off, what distributions should be made from your estate, and to whom those distributions should be made. Decide which provisions you do and do not want in your Will.

There are a number of Will statutes in Washington. Some of these statutes can make the Probate process more cumbersome for your loved ones to follow. With a little bit of careful planning (unless you want to revenge), your Will can be structured to avoid a burdensome process. Allow room in your Will to “self-adjust.” Your Will can be prepared to adapt to your changing needs.

As an example, it’s typical for new parents to create a will after their first child is born and then not revisit their Wills for years, even if they continue to have more children. If you are a new parent, your Will can be drafted to adjust your distributions so that future children are included.

Use additional legal tools to streamline the Probate process.

Depending on your circumstances, your attorney may recommend a Revocable Living Trust. These come in handy if you own property, or interest in a property, outside of Washington State.

If you live in Washington and are married, you may want to enter into a Community Property Agreement to protect your assets in case of divorce. t might make sense to change your property titles to reflect Joint Tenancy with Right of Survivorship.

Some people create Payable on Death Accounts. These are all methods worth discussing with an attorney.

If you would like to schedule a consultation regarding any of these ideas, please call DuBois Cary partner Monica Cary at (26) 547-1486 or email her at monica@duboislaw.net.

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