James A. Jones, Attorney At Law
Plan Today, Peace of Mind Tomorrow

Tacoma Washington Elder Law Blog

Washington residents should consider pets in their estate plans

When planning their estates, one thing that Washington residents often forget about is their pets. Despite the fact that nearly two-thirds of all Americans own at least one pet, animals are often overlooked in estate plans. If you fail to plan, your furry companion could end up in a shelter or worse. To ensure that their pets receive the right kind of care, individuals should consider these four suggestions.

The first is setting up a pet trust. Through a pet trust, owners can specify who will care for their animals if they die. It will also provide the funds for the person to do so. A durable power of attorney goes a step further by allowing a named individual to provide medical care for another person's pets. A durable power of attorney can also be used while someone is still alive but needs another person to act make decisions on his or her behalf. An example would be when an individual is hospitalized or away on business.

Better to start estate planning sooner than later

Estate planning is one of the things in life that people in Washington and around the country tend not to consider until they have to. It is not pleasant to think about or plan for death, but it is best to think about it sooner rather than later. When people fall ill unexpectedly, it can be a scramble to get affairs in order, and a basic estate plan can be established with only a bit of time and effort.

The first step in many cases is to contact an attorney who has experience in these types of matters. For people who own significant property, a trust may solve most planning needs. There are benefits and drawbacks to each type, including irrevocable and revocable trusts. Even after the plan is established, it is important for people to stay in contact with their estate planning attorneys. Plans may need to be updated as the person's family or financial situation changes.

IRAs and trust beneficiaries

Washington residents who want to save for retirement may want to consider using an individual retirement account. If they decide to use an IRA, one of the things individuals should consider is to whom the funds should be left when they die. Some individuals may consider designating a trust as their IRA beneficiary.

Individuals who establish an IRA with a brokerage will typically be asked to choose a beneficiary. It is at this time that they can designate their trust. For individuals who have a new trust, they can review their financial institution's online portal for instructions for modifying their beneficiary. Careful planning is necessary in order to name a trust, and consultation with a financial advisor is advised before doing so.

Estate planning and chronic illness

There are over 130 million people in the United States who suffer from a chronic ailment. Washington residents who have a chronic disease or a loved one who is chronically ill should make sure that their estate plan includes provisions that properly address health and aging issues.

The estate plans for people who have one or more chronic diseases should be the same as those for people who are not chronically ill. However, the estate planning documents should be modified or updated so that they are able to better address the needs of a chronically ill person. It is important that chronically ill people have the proper documents in place as soon as possible after receiving a diagnosis. Depending on the progression of their condition, their ability to comprehend and sign legal documents can be hindered.

Trust have some distinct advantages over wills

Trusts give Washington residents more control over their assets than wills. In fact, having a trust might be just as important as maintaining a will. There are several instances in which a trust provides extra protection. For example, because a last will and testament only takes effect after death, an estate owner who is unable to make their own decisions might be the subject of a lengthy probate process to appoint a guardian. Naming a guardian in a living trust could help prevent this and other problems.

Blended families are more the norm than exception in today's world. Parents who want to leave assets to their children may be able to accomplish that goal more effectively with trusts than wills. With only a will, assets might end up in the hands of the new spouse instead of the children.

Considering online assets when making estate plans

When people in Washington think about making a will or a trust, they may think first of their bank accounts, real estate and other forms of physical property. However, digital assets are becoming increasingly important in the estate planning world. As people live more of their lives online, access to digital accounts can be a critical aspect of planning for the future. Writing a will is often just the first step in developing an estate plan; people need to review their documents in the years to come to reflect changes to their lives as well as alterations to tax and estate law.

At the same time, they may also want to review their wills to make sure their digital assets, including email accounts, social media pages, cryptocurrency wallets and other online items, are addressed. Beneficiaries may struggle with obtaining access to these accounts if there is not a plan in place to transfer knowledge and information after a person passes on. This is particularly true as many sites and companies do not have provisions to pass accounts on to survivors after the original account holder passes away.

How do living trusts work?

For many people, estate planning means drafting a last will and testament. Although almost every person should have a will, there are other documents that may also be appropriate to include in an estate plan.

For example, if you have significant assets or a complicated estate, a living trust may offer you more benefits than a will can offer. However, people generally know less about living trusts than they know about wills, which can sometimes make them shy away from implementing living trusts in their estate plans.

Carrie Fisher estate valued at nearly $7 million

Washington fans of actress Carrie Fisher may be surprised to learn she was diligent about her estate plans. There have been multiple media reports of other well-known celebrities who have failed to take such steps prior to their deaths. According to probate court papers filed by Fisher's estate executor, her assets are valued at just under $7 million. The executor is seeking a final distribution of her assets.

In the document regarding Fisher's estate, the executor states all administration-related expenses have been paid to date. He also states he has performed his duties as stipulated by Fisher's estate documents. The will the actress had, which was created in early 2016, will become part of a trust she established, officially known as the Carrie Fisher Living Trust. The executor will also serve as the trustee. The beneficiary of Fisher's trust is her daughter, who also has a career in acting.

Estate planning misconceptions remain for many

Most Washington residents, if asked, would likely acknowledge that everyone should have some form of estate plan in place. Despite that, a significant percentage of adults have not taken basic steps towards accomplishing that objective. Other than a reluctance to recognize one's own mortality, one reason for this seeming inconsistency may be confusion and lack of understanding as to what exactly an estate plan entails. Perhaps a clear understanding of the purpose the various documents in an estate plan serve will help provide greater incentive for individuals to prepare for the inevitable and better secure their future.

One misconception that financial planners regularly see is confusing financial planning and estate planning. Both are necessary and certainly interrelated, but they are not the same. Another commonly held view is that a trust is only a tool for high-asset estates, yet a trust can be valuable in saving any estate the added expense of probate and should be considered by anyone who owns real property. Although a will and a trust can serve some of the same purposes, they are not interchangeable documents, and each has different advantages.

Beneficiary designations and estate planning

When Washington residents think about planning for the future and distributing their assets, they may consider making a will or even a trust, envisioning that this will make sure their wishes are carried out. However, what many people do not realize is that some of the largest and most important assets a person may have are often not controlled by a will at all, because they do not go through probate. Life insurance policies, retirement plans and investment funds often have a pay-on-death beneficiary, who will receive the payout after the original owner passes away.

In many cases, people have insurance policies or retirement investments through their employers, and they may have signed beneficiary forms as part of a large stack of paperwork when they were first hired. This may mean that their wishes are not currently reflected in those beneficiary details; in some cases, people may have named their now-deceased parents as beneficiaries when they first started a job, while others named a now-former spouse. For many people with high-powered corporate jobs, a significant portion of their estates may pass through these kind of beneficiary designations rather than through the probate courts.

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