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.
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.
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.
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.
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.
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.
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.
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.
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.
Washington residents and Americans throughout the country may have learned from former President George H. W. Bush a few lessons about how to create an estate plan. For instance, when a couple is married, assets may go from the deceased spouse to the surviving spouse. However, this may not be advantageous if the second spouse dies weeks or months after the first one does.