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James A. Jones, Attorney At Law
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Tacoma Washington Elder Law Blog

Common errors in beneficiary designations

Beneficiary designations can be an important part of an estate plan for people in Washington, but they are often mishandled. Retirement accounts, annuities and life insurance are among the assets that are passed using a beneficiary designation.

One common error is not naming a beneficiary at all. What happens to the asset at that point depends on the type of asset and the rules of the financial organization. The asset might go directly to the probate estate, which could cause delays and incur tax. Some people who do complete beneficiary forms fail to do so clearly. For example, if two family members have the same name, such as a senior and a junior, the form needs to clarify who the asset should pass to. This type of error could also lead to a delay or even litigation.

Choosing the right type of trust in estate planning

Tacoma residents who are creating an estate plan might wonder whether they should use a trust and if so, what kind. A living trust is one of the most flexible because it leaves the grantor in control of the assets. The person can move assets in or out of the trust, change beneficiaries or even cancel the trust.

People who have a loved one with special needs who gets benefits from the government can set up a special needs trust. This type of trust can help support the person without endangering the person's access to the government benefits. Another type of trust is an incentive trust. This puts certain requirements on the beneficiaries. For example, the beneficiary might be required to complete a college education before getting distributions. With a charitable trust, distributions can be made to charity and to the trust owner or other beneficiaries.

How to make estate planning less stressful

Many Washington residents do not look forward to the estate planning process. This is because there are a lot of stressful elements to it. For instance, an individual may not know which documents to include or who to leave money or other assets to. It can also be stressful for the simple fact that no one wants to think about dying.

However, there are ways in which individuals can make the estate planning process an easier one. One possible strategy is to seek the help of an attorney who may be able to provide insight into how it should be structured and how to structure it in accordance with applicable laws. Once the plan is created, the attorney can help review it to ensure that it still does what a client wants and needs it to.

Milestones for revising an estate plan

There are several points throughout a person's life when it may be a good idea to update an estate plan. A person who turns 18 should, at minimum, have powers of attorney that name people to make healthcare decisions and take over finances if the person is incapacitated by illness or injury.

Most people revise the estate plan when they get married. The plan may need another revision if they have a child. The estate plan might need to name the surviving spouse as the full beneficiary. Otherwise, minor children may inherit a portion of the estate. The surviving spouse might then have to go to court and get approval as a guardian to manage the children's inheritance until they turn 18. An estate plan should also name a guardian for minor children in case both parents die at the same time.

The necessity of an estate plan

People in Washington should not put off creating an estate plan just because they have no children or close relatives. An estate plan does not just establish how assets are to be handled after a person's death. This document also addresses what should occur if individuals are unable to make decisions for themselves.

Adults should create an estate plan so that the proper legal documents are in place in case they become incapacitated and are not able to make decisions for themselves. Necessary documents can include a durable power of attorney for financial and legal decisions and an advanced directive for medical care. Without these legal documents, there are certain decisions that cannot even be decided by a person's spouse. It will also be necessary for a person's relatives to have to go through guardianship proceedings in court in order for someone to be appointed to make decisions on the incapacitated person's behalf.

Digital assets and estate planning

When creating or updating their estate plans, residents of Washington should make sure that they address how their digital assets are to be handled. This may require that individuals do some legal research, as there are number of challenges that arise when addressing digital assets.

Locating digital assets online can be an issue due to the vast amount of online information that may have to be sifted through. Access to digital assets is another concern, as the majority of assets that are stored online are accessible only if the correct username or password is used. Another challenge pertaining to digital assets is that ownership rights of digital assets are not has defined as those for traditional assets.

Strategies for an estate planning conversation with your parents

We know that it is not easy to have the conversation with your parents about estate planning. It is not hard to figure out because so many people are not having the conversation. However, for those who are able to sit down and have this very important conversation with their parents can find tremendous benefit.

The barriers that can keep this conversation from happening are understandable. Most often, you may believe it will look greedy and selfish by trying to force a conversation about your parents estate planning. You may be uncomfortable because your family may have never spoke on the subject of money before. You may be like some people who just do not like talking about what will happen when a member of the family dies.

How probate court could affect heirs

It's a common belief that going to probate court can be a major difficulty for heirs in Washington. However, this may not always be the case. By planning ahead, an estate plan can make the probate process as easy as possible for everyone involved. The first step is to make sure the benefactor has a will. In the will, an executor who is in charge of distributing assets to the heirs can be named. This means the court will not need to name an executor.

There are several tactics estate planners can use to avoid probate. One is to name heirs as co-owners on banking accounts and other assets. This does, however, come with some risks. One heir could decide to run off with a large sum of money or expensive asset never to be found again. Another way to possibly avoid probate is to set up a revocable trust where all the assets can be protected and distributed according to the benefactors wishes.

Estate planning encompasses more than the transfer of assets

Writing a will or thinking about what happens during a serious medical crisis are easy things for people in Washington to put off. People typically find these uncomfortable topics difficult to raise with their loved ones, but failing to put wishes into writing could inflict turmoil and financial burdens on close relatives when someone dies intestate or suffers an event that leads to incapacity. Although expressing final wishes about the distribution of an estate remains important, everyone regardless of age or wealth could benefit from preparing a durable power of attorney.

A power of attorney document allows a person to grant a trusted individual the legal ability to manage property, money or health care under certain circumstances. Such a document could enable the trustee to make sure that someone's bills get paid on time during a medical crisis or access investments to pay for critical medical care.

Making estate planning changes after a divorce

Should Washington couples remain married long enough, it's not unusual for them to do some type of mutual estate planning. However, when a major life event like a divorce occurs, it's typically advised that newly single adults review their estate plans, especially if an ex is the main beneficiary or selected executor. In some states, exes are automatically removed from a will following a divorce. Even when this is the case, there are still other adjustments that may need to be made.

The extent of post-divorce changes that may need to be made will depend on what type of estate planning occurred during a marriage. For instance, an ex-spouse might be named as a personal representative. There are also situations when an ex's family members may be listed as guardian choices if a marriage produced children or successor personal representatives. If it's no longer desired to have former in-laws included, estate documents will need to be changed to reflect this.

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