Have you done your Estate Planning?
If you don’t have a will, the state has one for you.
YOU NEED MORE THAN A WILL
A will only protects you when you die. A complete estate planning strategy includes documents such as:
- Durable Powers of Attorney where you name an agent to act in your stead if you are unable to act yourself
- Health Care Directives where you express your desires with respect to life support
- Cremation/Burial and Funeral Directives where you give instructions about your funeral arrangements and how you want your bodily remains handled.
- Depending on your circumstances, there may be other documents that you will want to add.
WE CAN HELP YOU WITH THE FOLLOWING:
ISN’T A TRUST BETTER THAN A WILL?
When most people speak of trusts, they’re talking about Revocable Living Trusts. With a Revocable Living Trust, you transfer ownership of all of your assets to the trust, so that you don’t own them anymore. The Trust is managed by a trustee (typically you, during your lifetime) for your lifetime benefit. When you die, a new trustee will take over to manage the assets for the benefit of the successor beneficiaries you have named.
The benefit of a Revocable Living Trust is that it eliminates the probate process when someone dies, which in many states, is complicated, costly and time consuming. In Washington, however, the probate process is so simple, quick and inexpensive, that most estate planning professionals believe the costs and complexity of trusts are not justifiable. So we use Wills instead.
DEATH (ESTATE) TAXES
Currently, under federal law, every U.S. tax payer can die with about $5.5 million in assets (including the death benefit of any life insurance policies you may own) before becoming subject to federal estate taxes. So for most of us, federal estate taxes aren’t an issue.
Washington State, on the other hand, starts taxing at $2 million. If you take into consideration the value of a home, retirement accounts and life insurance, there are a considerable number of people who will be affected by the Washington tax which quickly ratchets up to 19%. Married couples who have wills can effectively double the amount of the exemption to $4 million. But without a will the second $2 million of exemption will be lost. For singles, while there are not as many options available, there are significant tax planning opportunities that come with having a will.
It’s not just estate taxes that are more problematic without a will. Income tax issues can be a problem also. For example, under Washington law, you can designate beneficiaries of retirement plans in your will if you haven’t signed beneficiary designations. That will often allow the beneficiaries to continue to defer paying taxes on the funds in those plans until they take them out. But without a will, all taxes will be due upon death at the highest tax rates. In a will you can also designate that assets such as retirement plans be paid to charities so that no tax is incurred – again, this isn’t possible if you don’t have a will.