Estate Planning Is For Everyone
A great majority of individuals assume that estate planning is only relevant for the rich. Estate planning is for everyone, not just the rich. However, those who have amassed fortune may be more concerned with how to preserve it. Because the loss of time and money as a consequence of poor estate planning is more damaging, good estate planning is generally more impactful for people with modest resources.
You, believe it or not, have an estate. Almost everyone does, in fact. Your estate includes everything you own, including your vehicle, house, and other real estates, as well as your bank accounts, investments, life insurance policies, furnishings, and personal belongings. Everyone has an estate, no matter how beautiful or modest, and they all have one thing in common: you won’t be able to bring it with you when you die.
When that time happens (and it will, sooner or later), you’ll probably want to have an influence on how those items are given to your loved-one or charitable groups you value the most. To make sure that your wishes are followed, write down who you want to get anything from you, what you want them to have, and when you want them to receive it. Naturally, you’ll want this to happen at the lowest possible cost in terms of estate taxes, legal costs, and court expenses.
When you work with our Tacoma law firm, you can expect an emphasis on service and finding solutions. We treat our clients as if they were our own friends and family, giving the best quality legal representation and service. We cultivate a relationship with our clients based on transparency and trust. For this reason, we get so many referrals from happy clients. Call us today to discuss which estate plan is best for you.
What Does ESTATE PLANNING Mean?
An estate plan is made up of many different documents. Each document provides a distinct purpose. Everything from establishing trust funds to naming a power of attorney can be included in estate planning.
The intention of estate planning is to protect and safeguard all of your hard-earned possessions. The goal is, of course, to lower the amount paid in taxes, legal bills, court expenses, and other expenses.
The following are the most commonly used estate planning tools:
- Last Will & Testament
- Living Will
- Power of Attorney
- Living Trust
- Deed of Gift
Last Will & Testament
One of the most essential legal papers a person may write throughout his or her lifetime is a Last Will and Testament. If a person dies without a Will, they are considered to have died “intestate,” and state laws will govern how and to whom their possessions are dispersed.
Under intestacy rules, if a person dies without a Will, the beneficiaries have no recourse against the court’s disposal of that person’s inheritance. Even if that individual verbally indicated different preferences during their lifetime, the laws dictate the designation. A legitimate Will allows a person to legally specify how and to whom their property will be allocated.
To be legitimate, a will must carry-out the legal standards established by the state. Most states will also recognize a Will performed in another state as long as the document is a legal Will under the laws of that state.
The following are the general conditions for a valid Will:
- the document must be written (typed or printed),
- signed by the person drafting the Will (commonly referred to as the “testator” or “testatrix”), and
- signed by two witnesses who were there to see the maker’s execution of the document and who also witnessed each other sign the document.
A living will is a legal document that lists your medical care preferences should you become incapacitated.
A living will is intended to instruct caregivers if you are no longer able to make decisions by yourself. It may also protect those close to you from having to make tough decisions regarding your care, reducing the possibility of confusion or conflicts over what is best for you.
It differs from a last will and testament, which specifies how you want your possessions distributed.
People often believe that making a living will can wait until they are sick or elderly. However, an unforeseen setback or sickness can strike at any moment.
Power Of Attorney
Many people opt to designate someone to make decisions for them. This is known as power of attorney. When you are unable to manage your affairs, you usually select a spouse, member of the family, or close friend to do so.
There are several types of powers of attorney, each with its own reach, validity, and set of conditions. It’s crucial to know that you can appoint a power of attorney for healthcare and power of attorney for finances to separate people if you want. It should go without saying that your power of attorney is someone you could trust with your life.
A living trust, sometimes known as an “inter vivos” trust, is basically a trust created while you are still alive. When you die, the trust property is distributed to the beneficiaries named in your living trust. You may use a will instead, but wills must go through probate, which is the court proceeding that controls the handover of your property to your heirs.
As part of their estate planning, many individuals make a revocable living trust. This type of trust can be modified or revoked (canceled) at any time. Usually, you will designate yourself as the “trustee” of your trust. This ensures that you maintain control of the trust and its assets while you are alive. You’ll also designate a “successor trustee” in your trust document to take over and administer the trust once you die. This individual will distribute the trust’s assets among your beneficiaries. (If a married couple sets up a shared living trust, the successor trustee will take control when both spouses have died.)
Irrevocable living trusts, on the other hand, cannot be canceled (revoked) or amended once they are signed. Irrevocable trusts can be effective instruments for certain goals, such as estate-tax reduction, but they need relinquishing ownership and control of trust property.
Deed Of Gift
A deed of gift is a legal instrument that transfers title to real property willingly from one person (the grantor or donor) to another (the grantee or donee). A gift deed is often used to transfer real estate between family members or close acquaintances. Gift deeds may also be used to make a contribution to a non-profit group or charity. The deed provides documentation that the transfer is really a gift, with no strings attached.
A gift deed must fulfill the following elements to be valid:
- The grantor must intend to make a present gift of the property
- The grantee must accept the gift
- The grantor must transfer the property to the grantee
Because any ambiguity or reference to compensation might render the deed contestable in court, a gift deed must include wording that clearly declares no consideration is required or requested. It is not a gift when a promise is made to transfer ownership in the future, and any deed that does not transfer the interest in the property immediately or does not fulfill any of the aforementioned requirements may be voided.
The grantor’s complete name and civil status, as well as the grantee’s complete name, civil status, postal address, and vesting, are all included in a legitimate gift deed. Vesting outlines how the recipient (grantee) obtains ownership of the property.
Tenancy in common, joint tenancy, and community property are the three kinds of joint ownership recognized in Washington for residential property. Unless a joint tenancy with the right of survivorship is specifically created in the transfer, a gift of ownership of the real estate to two or more individuals is deemed to constitute a tenancy in common. Real estate immediately vests as community property in the case of a husband and wife.
A gift deed, like any other real estate transfer, needs a comprehensive legal description of the land. If the complete legal description does not fit on the first page, use an abbreviated definition and indicate where the full description may be found in the document. It is not allowed to use “See attached” or “refer to Exhibit A” for abbreviating the legal description. In Washington, a conveyance of real estate specified by lot and block, as well as an addition or plat, will not be filed or registered until the plat of such addition is filed for the record.
To demonstrate a clear chain of title, recite the source of title and describe any limitations connected with the property. Record the completed deed, as well as a finished Washington real estate excise tax affidavit that is needed for gift transfers. A department-approved additional statement must be written and attached to the affidavit.
The receiver (grantee) of a gift of real property is not obliged to report the value of the gift as income, but if the property earns income after the transaction, the recipient is liable for paying the applicable state and federal income taxes.
Our Law Firm Can Help You Choose An Estate Plan That Is Best For You
We recognize that each person’s estate planning concerns are unique. You may have unusual assets or family circumstances that need special consideration. Our lawyer James A. Jones, Estate Planning Attorney at Law, works closely with clients to design personalized estate plans that are tailored to their specific needs. Talk to us now!