Quantcast The Six Most Common Estate Planning Myths | Seattle Washington Estate Law | Estate, Planning, Plan, Trust, Living, Loved, Wills
 
 
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I am too young to worry about estate planning.

Anyone in their 40s, 30s or even 20s is not too young to consider estate planning. Generally people in these age groups are planning for their future. Even if you do not have a “large” estate, there are many reasons to complete an estate plan aside from saving taxes. If you have children, at a minimum, a Will is essential. Without a Will, the State of Washington will select a guardian for your children, and that person may not be your choice. Additionally, without a Will, the State of Washington will decide who gets your property and in what manner. Finally, dying without a Will - and death can come before we expect it - ensures that your property will be subjected to the expense and delay of probate.

My estate is too small to worry about estate planning.

Estate planning is important for everyone. Good planning, no matter how large or small your estate, will allow you to control who receives your estate, in what manner and when. Good planning also provides instructions for your care and that of your loved ones in the event of your mental disability. It allows you to leave explicit instructions for the care of your loved ones and create protective trusts for your young, disadvantaged, or adult children, and grandchildren. Good planning also allows you to control all your property, including retirement plans and life insurance. Conversely, designating your beneficiaries on a standard form “beneficiary designation” often means losing control of a major part of your estate. It does not enable you to leave instructions or provide guidance to your loved ones. With good planning you can be assured that your estate is ready for the future.

I have a Will; that should cover everything.

Wills are the most common estate planning tool used. However, there are pitfalls to relying exclusively on a Will as your estate plan. Wills are fully public and open to inspection by anyone who wants to know about your Will and affairs. Wills offer no planning or direction for you or your family in the event of your mental disability, only on your death. Wills guarantee probate, which can generate personal repersentative and attorney fees and cause much time delay before your loved ones can receive their inheritance. Wills generally cannot control their maker’s life insurance proceeds, retirement benefits, or jointly-owned property. Finally, Wills are often bare-bones form documents written in hard to understand language. They do not capture the hopes, fears, dreams, values, and ambitions of their makers.

There are many other reasons for preparing an estate plan. These include providing disability planning for you, creditor protection for your loved ones, remarriage protection, and catastrophic illness protection, to name a few.

I have taken care of everything with a living trust.

A properly created and funded living trust will allow you to avoid probate, provide disability planning and save money for your heirs. However, although most living trusts appear to be better than Wills, they are about the same as Wills if not “fully funded” because they do not avoid probate. Funding the trust means retitling of the assets and transferring them into the trust. In addition, most living trusts are sterile legal forms that do not contain instructions for loved ones. They only accomplish limited objectives.

If you have a medium or larger estate, a living trust alone will not protect you from the estate taxes that are due on the estate value above the threshold limits. You will need to use some other planning tools to reduce the value of your estate and minimize the taxes due.

Even if you have a living trust, you still need to have a Will. One thing you cannot do with a living trust is to provide a guardian for any minor children you may have at your death. If you do not have a Will providing for a guardian, the State will determine your children’s guardian. Additionally, without a Will, any assets that were acquired and not added to the trust will pass to your heirs through probate according to the State’s rules, and may not go to whom you desire.

The final elements that may be overlooked, if you think your estate plan is complete with just a living trust, are durable powers of attorney for finances and health care. These documents create a plan for your future when you may no longer be able to manage your finances or make decisions regarding your health or personal care due to mental incapacity. With these documents, you identify a trusted person to act on your behalf and in your best interests to make financial and health care decisions for you.

Establishing durable powers of attorney and advance health care directives while you are in good mental and physical health will allow you to avoid the prospects of a court-supervised and expensive conservatorship.

I have done an estate plan. I don’t need to do anything more.

We know an estate plan works when every expectation that the client had in mind when they began planning is completely met. Unfortunately, most traditional estate plans just don’t work! We believe it is because many clients and professional advisors see estate planning as a transaction. They say, “I did my estate plan.” In reality, estate planning is a process, not a transaction.

Have you had any changes in your personal, family, or financial situation? Have there been changes in the tax law or non-tax laws that impact your estate plan? Have your advisors improved their knowledge through ongoing education and collected experience? Since everything constantly changes, you cannot expect a plan to accomplish what it was intended to accomplish if it is never updated. The costs of failing to update are typically far greater than the costs of keeping your plan current.

I don’t have anyone to leave my estate to. Why should I be concerned with estate planning?

If you want to receive a posthumous “thank you” from the State for your generous gift, then stop right here and plan no further. That’s right, if you do not have any heirs, and you do nothing, your entire estate will go to the State.

As an alternative, you may want to consider leaving your estate to a charity. Good planning of charitable gifts can be rewarding during your life, and can provide an ongoing gift after you are gone.

HOW WE CAN HELP

Our office creates estate plans that work. We offer client centered counseling to develop a plan custom-designed for you. The initial counseling interview is used to learn about you, your family, your estate and, most importantly, your goals. The next step is to design an estate plan based around your goals using a team approach that involves your other advisers, such as accountants and financial planners, in the planning process to ensure a plan appropriate for you. The final step is implementing an estate plan tailored to your needs and goals.

It is our goal to provide you with a plan that works. Plans that work allow you to control your property while you are alive and well, take care of yourself and your loved ones in time of disability, and upon your death give what you have, to whom you want, when you want, all at the lowest overall financial and emotional cost to you and your loved ones.

 

Locations

Seattle
1833 N 105th St., #301
Seattle, Washington 98133
Phone: (206) 547-1412

Redmond
By Appointment Only
8201 164th Ave NE Ste 200
Redmond, Washington 98052
Phone: (425) 698-2214