Nothing is certain except death and taxes. We might as well plan for both, right? Planning for the future doesn’t have to be a touchy subject. In fact, there are nothing but benefits to estate planning and protecting the assets you’ve worked so hard for.
Recent studies have shown that less than half of Americans have wills. Shockingly, only about a third of adults with children under age 18 have a will or living trust. Don’t be a statistic. Protect your assets and provide for your surviving family members by planning your estate now.
What Is An Estate?
Let’s take a step backwards and make sure we’re clear on the definition of an estate. Essentially, your estate is your total net worth in the eyes of the law.
An estate can include:
- Bank accounts
- Houses and other real estate
- Cars and other vehicles
- Life insurance
- Personal belongings
In short, your estate is everything you own and everything you owe. We’ll cover more on that later.
What Is Estate Planning?
An estate plan is made up of several different documents. Each document serves a different purpose. Estate planning can include everything from setting up trust funds to designating your power of attorney.
The goal of estate planning is to preserve and protect all of the assets you’ve worked hard to accumulate. Of course, the aim is also to reduce the amount paid in in taxes, legal fees, court costs, and other expenses as well.
Here are the most common estate planning documents:
LAST WILL AND TESTAMENT
The most important part of your estate plan is your last will and testament. In this document, you specify in great detail how your assets are divided, who will be the guardian of your children, and who is designated to carry out your wishes.
Keep in mind, your last will and testament is only applicable after you die. It does not offer any protection if you become physically or mentally incapacitated.
If you are in a condition where you can’t make decisions for yourself, a living will can help protect your wishes. For example, you may become hospitalized in an unconscious state in which your abilities are severely limited. If you have strong feelings about when or when not to receive resuscitation or life-sustaining care, you would indicate them in your living will.
POWER OF ATTORNEY
Many people choose to appoint a person to make decisions on their behalf. This is called power of attorney. Typically you would appoint a spouse, family member, or close friend to handle your affairs when you are unable to.
There are many different types of powers of attorney that vary in scope, duration, and circumstances. It’s important to note that you can grant healthcare power of attorney and financial power of attorney to different individuals if you’d like. It goes without saying that you should trust your power of attorney with your life.
A living trust is a legal document that places your assets into a trust during your lifetime. Upon your death, it is transferred to your designated beneficiaries. It is possible to create a living trust in addition to a last will.
The biggest benefit of creating a trust is it will help you avoid the probate process. In short, a living trust can help protect your assets from being drained by court and legal costs. It also helps things run a lot more smoothly in general, as your beneficiaries can receive their inheritance faster and with less hassle.
What You Should Know About Estate Planning In Washington State
If you die in the state of Washington without a will, the state will appoint an administrator to distribute your assets according to state succession laws. These laws give your assets to your “closest” living relatives. If you want a say in what happens to your assets upon your death — and you should! — make a will.
Probate is the legal process of settling the estate of a deceased person. Fortunately, Washington State has one of the simplest probate systems in the country:
- Your personal representative (as designated in your will) can act with complete authority and without court intervention in nearly all matters
- Attorney fees are not based on a percentage of the value of the estate
The state of Washington does not have an inheritance tax, but it does have an estate tax. That means there is no tax on the beneficiaries of an estate, but there may be a tax on the decedent’s estate itself.
There are several thresholds and exemptions and other things you should be aware of a discuss with your estate planning professional. In many cases, no estate tax is actually owed as a result of tax planning in the decedent’s will. Another great reason to plan your estate!
Federal and state tax laws are constantly changing. That’s why you should review your estate plan periodically to make sure it’s up to date.
How Opsahl Dawson Can Help
Don’t be overwhelmed by estate planning. All you need is a trusted partner to help navigate the process and help you make the best decisions for you.
At Opsahl Dawson, our estate planning process may include:
- Creating a will so that your wishes will be honored
- Updating your beneficiary designations
- Reduce federal and state estate taxes with trusts and gifting
- Consider both Federal and State estate taxes
Our team of experts will work with your existing estate planning attorney, or can suggest one for you, to make sure you feel confident about your estate plan. Contact us today to make an appointment and get all your questions answered about estate planning in Washington.