Attorney James Jones: [00:00:00] I think estate planning is too complicated or that they, you’ll get to it someday. I’m James Jones, a Washington State estate planning attorney, and I’ve helped hundreds of folks just like you turn someday into today. In today’s episode, I’m breaking it down step by step. How to create a simple effective estate plan that works under Washington law.
No legal maze, no big budget needed, just clear moves to protect your stuff and your people. Let’s build it together. One easy piece at a time. Ready to get it done. Let’s start Your legacy’s waiting.
You are listening to the legacy talk podcast hosted by James A. Jones, attorney at law and founder of sound legacy law, PLLC in Tacoma. Attorney Jones is here to talk about how to best protect your family assets and well, pulling stories from his more than 20 years of helping families and business owners protect their assets, create their estate plans, preserve their wealth and plan for the future.
Nobody wants to think [00:01:00] about estate planning, but life has a way of sneaking up on you and. And at any moment, something unexpected could happen that will leave you regretting not having acted sooner. So join attorney James A. Jones in the Legacy Talk podcast and together learn how to plan for your future today and have peace of mind tomorrow.
Attorney James Jones: welcome to Legacy Talk. I am your host, James Jones. On today’s show, we’re talking about how to create a simple and effective estate plan, a step-by-step guide.
And today’s story is a bunch of stories. I think I’ve been practicing law and focusing on estate plan for over 22 years. I have a million stories of people dying without a will or failing to implement their estate plan. Some are sad, like when a partner and an unmarried couple. Is leaving a surviving partner and two little kids like Maria and Tim that I talked about in episode 50.
Go back and listen if you haven’t, or [00:02:00] frustrating like Tomoko the single woman with no family who didn’t have anything in place so that her extended family in Japan that she didn’t even know and had never met, basically got everything we’re tragic. The husband who committed suicide and left his wife with a business that she couldn’t run and other investment assets with, which she didn’t have any idea of and didn’t know even where to start.
The reason these stories are so sad, frustrating, and tragic other than the people passing, is that they could have been all prevented with the simplest estate plan. They wouldn’t have had to have complicated plans. To make sure that their wishes were carried out and things were made much easier and straightforward.
So today we’re talking about how to create just that. So estate planning is a scary topic. We’ve talked about how it’s scary ad nauseum on this podcast. People don’t like talking about dying. You know, there’s lots of preconceived notions about estate planning and it’s, [00:03:00] oh, it’s only for the rich and I don’t have enough assets and I’m too young and all this.
If you haven’t listened to the last episode, go back and listen to it. It’s all about those myths and mistakes that people make. Okay. Estate planning though, is for everyone. It’s not just for the wealthy. It’s a way for anyone to control their legacy. Right. It’s more about deciding who gets your stuff than what the stuff is, or if you have a lot of money or something, right?
Even someone with a small apartment or a car bank accounts needs something in place for their estate plan. Without it, courts take over, right? Your wishes don’t count. The state law determines where everything goes and who’s in charge. So it really is for everyone, right? It’s not just for a select group.
It’s not just for the rich and wealthy. It’s not just for the old. So where to start? When you start thinking about your estate plan, you wanna start with a foundation. What is an estate, right? What is an estate? Well, a state is basically stuff, okay? Everybody’s got [00:04:00] an estate. ’cause we’ve all got stuff more of it than we probably need.
Many of us have garages and other places full of stuff that we probably shouldn’t keep around, but we still have, unfortunately. So start by listing what your stuff is. Do you have a house? Do you have a retirement account? Do you have any investments? Do you have a bank account? Do you have life insurance?
Do you have cars? What about jewelry? You know, heirlooms art, collectibles, that coin collection that. You have what? You were a kid. Do you still have that? I have a spoon collection that I started like in fourth grade, like little tiny collectible spoons, which I just found the other day, which is pretty interesting.
it had been lost for years and I found it, so, which is kind of cool. So this list should include those kinds of things like bank accounts, property, sentimental items. I’m not sure who’s, getting this spoon collection? I don’t have a plan for it for my kids. I guess, will have to see when you’re making this list, though, back to this important, when you’re making this list, don’t forget debts, right?
If you have a mortgage on your house, what [00:05:00] is it? Right? If you have a loan on your car, what is it? That reason for that is it determines the net value of your estate, right? So whether we’re worried about taxation or not, that has a big part of it, because if there’s debt against it, then your equity is less. Right. Usually with clients that I meet with, we send a, spreadsheet that they can use to fill out this information. Basically listing all of their debts and assets so that they can sort of put things in order, keep it organized, think about next, think about what kind of plan you want, right?
Understanding wills versus trusts in general. Right? Wills are for after death. Like wills don’t come into place until someone passes away. Trusts are for during your lifetime and for later, right? Wills are typically simpler than trusts, but they have their downsides. Typically, a will has to go through a public probate proceeding at court. That’s a court case. Then public. A judge gives an executor who’s in charge of your estate, the authority [00:06:00] to act, right. That’s under a will. Trusts are private because they don’t have to go through probate as long as they’re funded properly. That means they’ve got stuff in them, right? As long as your trust has stuff in it, it’s not going through probate or the stuff that causes probate like a house or a bank account.
Trust can also help you if you’re incapacitated, where wills can’t. So if you’re incapacitated and can’t make decisions, the trust says, well, the person in charge or the successor trustee, which is like the executor in a will, but in a trust, they can act during your lifetime if you’re not able to do it. And so that makes it so that you don’t have to go through a guardianship or conservatorship type of proceeding at court. For someone to help you with your affairs. ’cause the trust sort of handles that on the cost side. Wills are a little bit cheaper to do upfront. And we talked about this a little bit a few episodes ago actually.
Wills versus trusts. Wills are a little bit cheaper upfront. Trust costs a little bit more upfront and they take a little bit more legwork once you’ve get it. Got it in place ’cause you have to fund the trust, like putting bank accounts and stuff in it. My clients, we make that as easy [00:07:00] as we can. So it’s not too much legwork, but it’s a little bit of legwork and more legwork than a will’s gonna take.
But in the long run, Will’s gonna cost more because you’re going through probate in almost every case. Okay. Whereas a trust, you’re not gonna go through probate. So in the long run, you’re probably paying more overall, or your kids are, or your estate is for a will. Okay.
Another part of your estate plan that’s important is naming beneficiaries. Most people have they have a regular job like a, for a company. right? At large company around here, Boeing or Amazon or Microsoft or whatever, right? Costco, they have a 401k or some kind of retirement plan. Okay?
Those types of plans, you can name beneficiaries to decide who gets what, right? You can also make a list if you do a will or a trust to specify items like jewelry or heirlooms to go to a certain person. You can name beneficiaries on bank accounts too, through transfer and death or payable on death. You wanna look at your beneficiaries too, during major life events, after kids [00:08:00] are born, after people pass away after your divorce or someone gets divorced and make sure that the beneficiaries on your life insurance or your bank accounts are who you want them to be.
Look at those often ’cause they don’t go according to your will or trust, they go. According to the beneficiary designation that you appointed at whatever time that was, however long ago that was. So look at that, okay? Make sure that you’re up on that and that’s something to review. Okay? The next thing you have to do when you’re creating an estate plan is to pick someone that’s in charge. You gotta pick the people that are gonna be in charge, like an executor and a guardian, okay? This is your trusted team to carry out your wishes.
An executor is the person who is in charge of administering your estate that means they’re the ones that take all your stuff. If you’ve got a house or bank accounts, they’ll sell the house if that’s what you want. put all the bank accounts together or distribute the bank accounts to the beneficiaries, right?
They need to be detail oriented. They need to be reliable. It’s good that they’re good at communication. It’s often good that they’re not like [00:09:00] know-it-alls. Sometimes it’s good that they’re know-it-alls, but it’s usually not if they don’t have the capacity to compromise and feel what the others might be feeling.
You also need to have trustees. If you have minor kids okay? or if you have a trust, you’re gonna have a trustee instead of an executor. But in the case where you do a will, if we’re talking about a simple estate plan, you’re gonna have to have an executor and a trustee for your kids. Okay? If you have minor kids, if you have minor kids, you’ll create a trust for them to hold their money because minor kids can’t have assets.
Okay? And so that trustee can be the same as an executor. It doesn’t have to be though. And oftentimes it’s not. You’ll also need to pick a guardian if you have minor kids, right? The guardian is the person that’s sort of in charge of the kids when you’re not around, right? They have, say as far as medical decisions, you know, living conditions, all that stuff, right?
You wanna make sure that the guardians that you pick match your parenting style. You wanna make sure that they’re willing to do it. They’re it’s something also that you wanna make sure that they’re. Sort of going to follow what you would like them to do, right? Do they have your [00:10:00] same values? Do the kids like them?
Do they have the capacity to be parents or parent like, and don’t forget the backups, right? You wanna have backups for your executor, for trustees, for guardians, just in case the first choice can’t do it right or doesn’t wanna do it, or they change their mind or something in their life is going differently than it was when you put them in charge.
When they said yes. Which happens a lot, so make sure that you have backups. Okay? The next thing that you want to do to have a functional estate plan is to have a durable power of attorney. Now, a durable power of attorney is a document that allows someone to be appointed, right? You’d name someone to help you with financial decisions or medical decisions, or both, right?
A financial, durable power of attorney handles bills, you know. Writing checks, dealing with banks, all of those kinds of things. If you’re not able to, the healthcare power of attorney makes medical calls, right? If you can’t authorizing treatment, withholding treatment, dealing with medical records and doctors and hospitals and all of those things, you wanna put someone that’s good with money in the financial position as [00:11:00] trustworthy, more trustworthy, you know, as trustworthy as you can get, I guess you should say.
For healthcare, you wanna have someone that’s even keeled. That sort of understands the gravity of the situation, can make difficult decisions if necessary. Okay. Oftentimes, it’s best to pick someone that’s close to you. Proximity wise, someone that knows you well, would do things that you would be in approval of.
Don’t put a stranger in there. I’m power of attorney for a couple clients. I’m not power of attorney for very many people. I am for my wife and kids, my adult kids. I’m a power of attorney for a couple clients that don’t have many, much family around, and I, that’s not the best situation because I don’t always see them.
Right. Usually they check in and I have them check in with me just to make sure that they’re still doing okay. But other than that, it’s difficult, right? So you should have someone that you interact with regularly if you can.
Next thing to think about is how to avoid probate because it’s such a pain, right? You can avoid probate a couple different ways, right? There’s multiple ways to do it, but one of which we have already talked about, which is beneficiary [00:12:00] designations on life insurance or retirement accounts or things like that.
You can make joint accounts. At your bank and joint accounts typically go to the co-owner when one of the joint owners dies. The problem with joint accounts is that oftentimes if your co-owner is a kid or friend or a sibling or something and they, something goes wrong in their life and they get sued or something, right, or they, you know.
Have something bad happen, get divorced or something like that, then that account is on the table. That asset is on the table for their problem. So it’s not the best thing you could do payable on death designations at the bank as well. Same thing’s true there. It’s a little better than joint ownership though, because then if something bad happens to the payable and death beneficiary, it doesn’t seep into your account and they take your money.
You can do transfer on death deeds, which can avoid probate. There’s some nuance to those, and they’re not perfect for everyone. I’m not a huge fan. I do some of them, I do ’em occasionally when the situation is right, but I don’t do ’em all the [00:13:00] time. You could have joint ownership of a property with right of survivorship, a piece of real property.
That avoids probate. But then you have the same joint tenancy issues where you could lose the property from someone else’s mistake, right? And if you put your kid on the house, it could cause problems. And there’s benefits to inheriting versus giving the kid something during their lifetime, which we won’t get into today.
My personal favorite thing to do or use to avoid probate is a revocable living trust. They are the ultimate probate slayer. Okay. They give you full control during your lifetime, and they give a successor trustee, probate avoidance, control and control of the trust when you’re gone. If you wanna learn about why trusts are the ultimate probate slayer, you should find that episode.
It’s probably in the twenties if you look next thing to consider. And we talked a little bit about this in the last episode. Avoid these common errors, right? Don’t forget to sign your documents, sign your wills, and make sure that they’re signed properly. If they’re not signed properly, they do not work.
They are [00:14:00] invalid. You might as well throw ’em away. They’re just as good as any other piece of paper. You know, they’re not gonna do anything for you. Okay? Make sure you update your plan, right? If you have an old plan, update it or at least check it out. Make sure it’s still the way you want it to, right?
Like if your 90-year-old brother’s now executor, that’s probably wrong, right? If you’ve got a 60-year-old kid now or something, right? You probably want your kid to be in church. And be specific, right? Be specific, as specific as you can, specifically with regard to specific bequests. Hence the name. If you’re giving a kid a car or something.
Like what’s the year, what’s the make, what’s the model? Even the VIN number’s good. If you’re giving money to a charity, make sure you have the name of the legal name of the charity, their address at the time, their tax ID number is often great. To have in there and make sure that if something happens to that charity, where does the money go then?
Because charities go in and out from time to time. So be specific. Okay. Be specific. If you’re not willing to talk to a lawyer, [00:15:00] which is fine, like I’m a biased attorney, I do estate planning for a living. My livelihood depends on you coming to talk to me. But if you don’t wanna talk to a lawyer. Do something easy, right?
You can get a cheap will online, right? You can get a cheap will online. That in most cases, works. If you wanna make sure it does work, for sure, use a lawyer, right? If you wanna make sure it’s executed properly, that really all the questions and issues that there are available to think about or thought about.
Use a lawyer because the checklist that they give you. On those online sites isn’t complete, and it doesn’t usually include everything and you don’t always know what questions should be asked, okay? Or what things should be, you know, given a little bit of extra thought. ‘ cause the other one is probably done mostly through ai.
Lawyers help with more complex plans, trusts I do simple wills too, right? I do simple wills too, because they’re important. And they make it sure that families can have their stuff settled, right? But start simple if that’s what you wanna do. Start simple, something is better than [00:16:00] nothing, usually, as long as it’s signed, right?
Okay, so why are we doing this, right? Why are we doing estate planning? Why am I getting my will done? Why am I doing a power of attorney? Why would I wanna do a trust? It’s because of peace of mind, right? Knowing that your family and your legacy are secure. Trying to prevent fights among your children and friends and family about who gets what, right? Setting the rules, right? You’re in charge. It’s your stuff. You set the rules, not them.
Your kids and your spouse won’t have to stress over these legal messes if you do it right. Okay, and your values can live on as to how things are distributed. Okay? So if you do your estate plan properly and thoughtfully and legally, everything’s better. Okay? Everything’s better and easier, even if it goes through probate. It’s simpler because it’s not a hassle to get someone appointed if they have a will. It’s a lot harder to get someone appointed if there’s no will, and it’s a lot more expensive, takes more time, and it’s more of a [00:17:00] hassle, more hoops to jump through.
Right? If you have a trust, a revocable trust as your main plan, you’re gonna skip probate altogether, and that’s gonna be the best thing in the world for your family. They’re gonna come. If you did a trust with me, they, your family will come to see me. Well, maybe meet for an hour or two, talk about the next steps.
But the administration part, the legal part of, it’s not gonna take long. It’s gonna take a couple hours, you know, may maybe rather than six to 12 months like a probate. So peace of mind, okay? Don’t make your kids, or your wife, or your husband, or your partner or your friends, you know. Figure this out without you.
Right? Figure it out now with them, for them. Okay. And that’s it for today’s episode. Next week we will be talking about protecting your kids with guardianships and trust. We’ve alluded to that a little bit in the last two episodes. Minor kids need trusts, minor kids need guardianships. Next week we’re gonna get into that in a more complete way.
so come back for next week to take a listen to that episode. Thanks for listening to [00:18:00] today’s episode of Legacy Talk. If you like today’s episode and would like to learn more, please like and subscribe for more great content. I’ve been your host, James Jones, to your legacy.
Thank you for listening to the Legacy Talk podcast by attorney James A. Jones. If you found today’s episode helpful, we ask that you like and follow us on all major platforms so you don’t miss out on the latest episode. If you have questions for Attorney Jones, reach out at info@joneslegacylaw.com or visit our website at jones legacy law com.
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