What is Estate Planning?
Estate Planning is an opportunity to enhance peace of mind while creating structure, stability and continuity for the future. Estate Planning enables individuals and families to accomplish these goals by addressing in advance some of life’s most difficult eventualities and inevitabilities. Both you and your loved ones may avoid enormous stress and uncertainty by thoroughly and honestly assessing the circumstances of your estate–including all assets and debts—and making decisions about how and by whom your estate should be managed, well in advance of eminent need.
What is your Estate?
Your estate is comprised of all the property, assets and debts you personally own and may include partial assets you hold jointly through marriage or business. In fact, your estate may be as small as the clothes on your back or a vast and diversified personal empire.
Who needs Estate Planning?
The short answer to this question is almost every adult. Estate Planning becomes more critical for those with substantial assets (even if it is just cash or savings), anyone who owns a business, everyone who has a minor child, those with an heir who receives essential government benefits, and anyone with assets of any type who desire to choose how those assets are disposed of at the end of their life. Estate Planning is also important for those who need to designate Powers of Attorney to another person prior to high-risk medical procedures; those at risk of becoming incapacitated long-term; anyone traveling extensively, especially abroad; and other reasons. People who desire to communicate specific requests for medical care, palliative treatment, end-of-life care or funerary wishes are also strongly encouraged to utilize Estate Planning to ensure their specific wishes are known and adhered to.
Why bother with Estate Planning?
This question usually comes out something like “Why should I bother with a Will or Estate Planning when I am going to be dead and won’t care anyway.” The question arises from many points but primarily from the misconception that Estate Planning is all about death. End of life concerns are certainly a central reason for estate planning, but at its core the estate planning process is about life, not death. It is about helping yourself and helping your loved ones to experience the peace of mind that comes with having a plan to deal with whatever circumstances might arise while you are alive as well as at the end of life, yours or theirs.
Many of the principles of Estate Planning have nothing to do with death at all. As we go through life’s many adventures, estate planning provides a forum for transparency and honesty in developing relationships, acquiring property, and building the legacies we will leave behind for future generations.
Estate Planning Essentials
Your Last Will and Testament, or just Will, sets out the provisions for how your estate should be disposed of at the end of your life. Your Will also names the executor or personal representative of your estate, a person or persons who will be responsible for carrying out the provisions of your Will. These provisions typically include instructions about how and to whom to distribute the property and other assets of your estate. In some cases, trusts known as Testamentary Trusts are created through the provisions of a Will to establish legal entities responsible for managing and distributing property and assets of an estate. In such cases, the person, persons or entity responsible for managing the trust, known as Trustees, are also outlined in the Will along with their specific duties. A Trustee or Trustees may or may not be the same people or persons named as Executor or Personal Representative of your overall estate.
Who needs a Will?
- Anyone who owns real property or other tangible assets including cash, savings and additional financial portfolios;
- Anyone with an heir receiving government assistance;
- Anyone who has minor children;
- Anyone who owns a business.
With a Power of Attorney document you grant specific legal authority to another person to make specific types of decisions and act upon those decisions on your behalf. Often, a power of attorney authorizes your designated representative to make legal, financial, business, personal or medical decisions for you, based on the specific provisions you set forth in the document. When the power of attorney is specifically designated as “Durable” your personal representative will have the authority to make decisions and act on your behalf even in the event that you become mentally incapacitated and unable to make decisions for yourself. Without the “Durable” designation, the authority granted by the power of attorney document ends upon your written and notarized revocation; at the time you are determined to be mentally incapacitated; or upon your death. All authority granted by a Durable Power of Attorney will also end upon your written and notarized revocation or at the end of your life.
You need a Power of Attorney if:
- You are an unmarried couple.
- An older person.
- A person with decreasing abilities or potentially incapacitating illness.
- You travel frequently.
Directive to Physicians- Directives to Physicians (Living Wills) provide specific information about the way you wish to be cared for medically in the event that you are unable to speak for yourself. A Directive to Physicians not only allows you to control what type of treatment you receive if you are incapacitated, it relieves your family from having to make very difficult “life-or-death” decisions about your care.
Who needs a Directive to Physicians?
EVERY ADULT SHOULD HAVE A DIRECTIVE TO PHYSICIANS. Remember to share it with their families and relevant medical providers to ensure your wishes are known.
Trusts are legal entities specifically created to manage the assets (including real property) of an estate. Trusts may be created for a variety of nuanced purposes but all fall under two main classifications, Revocable Trusts and Irrevocable Trusts. With a Revocable Trust, its terms may be modified during the lifetime of the grantor and typically become Irrevocable Trusts upon the death of the grantor. After an Irrevocable Trust is created, the terms of the trust may not be modified nor the trust itself terminated without consent of the beneficiary. Unless otherwise specified in the trust, upon funding an Irrevocable Trust, the grantor relinquishes all rights and ownership to the trust assets.
Some common types of trusts include:
- Revocable Living Trusts are trusts created during the grantors life to manage the property or assets from the grantor’s estate while he or she is still living and in the event of incapacitation. During the grantor’s lifetime, the terms of the Living Trust may be modified. Upon the death of the grantor, the Revocable Living Trust may become an Irrevocable Trust.
- Special Needs Trusts are a specific type of trust by which grantors may provide financial support to persons with disabilities who receive critical state or federal assistance without jeopardizing the beneficiaries eligibility for those programs due to income guidelines. Special Needs Trusts may be either revocable or irrevocable but typically will become revocable upon the death of the grantor.
- Testamentary Trusts are trusts created by the provisions of the Will of the grantor upon their death. Many types of trusts, including Special Needs Trusts, may be created in this fashion for the purpose of disposing of the assets of one’s estate. Grantors may use these trust to disburse and manage inheritances to heirs, charitable contributions or to protect assets from future creditors.
Who needs a trust?
Anyone with property or assets who wishes them to be managed in a specific manner during their life or upon their passing should consider the benefits of establishing a trust.
Estate Planning Attorney in Kitsap County
Compass Legal Services, P.S. is a Kitsap County Estate Planning Law Firm based in Silverdale, Washington and centrally located to Bremerton, Port Orchard, Silverdale, Poulsbo and Bainbridge Island. If you are interested in learning more about how to create peace of mind and continuity to last generations for your family through estate planning, please contact our office at 360.471.3300.
We provide a discounted consultation for first time clients. We are only able to provide full legal representation for clients with litigated matters such as Family Law or Divorce filed with the Superior Court in Kitsap County, Washington. We are happy to provide legal consulting services for other non-litigated matters such as Estate Planning and Business Startup & Incorporation for clients across Washington State. Registered Agent services are available for in-state businesses and domestic out-of-state businesses operating in Washington State. We are unable to serve as registered agent for foreign entities.