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ESTATE PLANNING AND WILLS: QUESTIONS & ANSWERS

CONTENTS

Why Have a Will?
In Will You Can Decide Who Receives Your Property.
In a Will You Can Appoint Guardians for Your Children.
You Can Appoint Trustees for the Estate of Your Children in a Will.
In a Will You can Appoint Executors.
With a Will You Can Save Taxes.
You can give to a Charity in a Will.
What other Estate Planning Documents should I consider?

Why Have a Will?

A Will is often the major piece of any estate planning.

In a Will You Can Decide Who Receives Your Property.

If you do not have a will all community property will be given to your spouse. Your separate property will be divided between your spouse and children or your parents and siblings. If you have only children (or grandchildren), the estate is divided among your children (and grandchildren). If you have no spouse, children, or grandchildren, the estate is distributed to your parents, brothers and sister, grandparents, aunts and uncles, or cousins, depending on who survives you. If you would like your property to be distributed different that provided by State law, it is a good idea to have a will that says that. Estate Planning can accomplish that.

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In a Will You Can Appoint Guardians for Your Children.

Without a will, if your spouse does not survive you and you have minor children and your husband or wife did not survive you, a court will appoint a guardian for their persons. The guardian may not be someone you would choose and your children would receive their inheritances at the age of eighteen. If you have minor children, you have the right to appoint the guardians who will take care of your children upon the deaths of you and your spouse. Estate planning can provide for a guardian in a will.

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You Can Appoint Trustees for the Estate of Your Children in a Will.

If you have minor children, you also have the right to appoint a guardian of their estates. A guardian of the estate invests and takes care of the property that a minor inherits. While a guardian of the person takes the place of the parent in caring for the minor, it is usually better to appoint a trustee and put specific directions in the will for applying the child’s inheritance for support and education, and specific directions for the age at which the child may receive the balance of the inheritance outright, free of trust. With proper estate planning, a will establishes an appropriate trust and you can name the trustee.

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In a Will You can Appoint Executors.

The executor (or administrator or personal representative) of the estate is responsible for finding the assets, paying the debts, paying the taxes and distributing what is left to your heirs. You can decide who should be the executor of your estate. If you do not have a will that names your choice then the Court will decide who will act as the executor. The person (or persons) who inherit your estate is usually appointed to serve as the executor of your estate, to collect your assets and settle your estate. With proper estate planning you can decide who the executor of your will should be.

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With a Will You Can Save Taxes.

Having a will does not, in itself, save any taxes. If you have a will you can include provisions that would reduce or eliminate your estate inheritance taxes. A spouse may leave (and most do) their entire estate to the surviving spouse. There would be no tax because of the marital exemption protecting all assets transferred to a spouse. However, there are circumstances that could lead to higher taxes when the surviving spouse dies. That is because each spouse (and each person) has a personal exemption. For the federal government it is $2 million for 2007. For Washington State, the exemption is also $2 million. That may change for different years. If a spouse passes all their assets to the surviving spouse, this personal exemption is lost. When the surviving spouse dies, only the one personal exemption may be used. Often, a trust is used to transfer up to $2 million to when the first spouse dies. The trust income and principle may still be used by the surviving spouse but upon the death of the surviving spouse the trust assets are then passed to the children or other heirs. The surviving spouse may then use their exemption of $2 million dollars. The result is that a total of $4 million dollars is protected from estate or inheritance taxes. Hundreds of thousands of dollars can be saved in taxes using this approach. Proper estate planning with a will and trusts can save you money in taxes.

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You can give to a Charity in a Will.

If you wish to leave any of your assets to a charity, you will need a will. There are tax savings for charitable contributions. Proper estate planning can provide in your will for any charity you would like to help.

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What other Estate Planning Documents should I consider?

Other Estate Planning documents include Community Property Agreements, Durable Power of Attorney, Directive to Physicians or Living Wills, and Trusts.

A Community Property Agreement is when a husband and wife agree on how to treat the status of their property. In the context of estate planning that means using an agreement that on the death of one spouse, all property is declared to be community property and to vest with the surviving spouse. Although some procedures must still be followed, probate is often avoided and attorney fees are reduced.

Durable Power of Attorneys are used to give your spouse or some other person the authority to sign your name for some or all of your legal affairs. It can include a Health Power of Attorney. It can be designed to be good at all times or only times that you may be incompetent. The Power of Attorney is only good as long as you are alive or it is not known if you are alive.

Directive to Physicans are also know as Health Directives or as Living Wills. This is a document that you describe your opinion of what efforts or medical care should be given or not given to keep you alive when you can not speak for yourself.

Trusts can be used for many purposes including for minors, individuals with special needs or to protect your assets often referred to as living trusts.

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We have represented clients throughout South King County and more specifically Auburn, Maple Valley, Kent, Des Moines, SeaTac, Federal Way, Renton, Tukwila, and Burien.

To make an appointment, please call 425-277-0977 or click here for an Appointment.

Law Offices of David P. Tracy
108 Wells Ave. S.
Renton, Washington 98057
425-277-0977 Fax 425 277-4749

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