10 Things Young Families Should Think About When Drafting a Will and Estate Plan
An estate plan for 99% of people usually consists of a drafting a will, durable power of attorney and a medical power of attorney with an optional health directive. A trust may also be created, however for most common folks it is not necessary as a testamentary trust provision can be added to a will for the benefit of minor children. Attorney Richard Symmes discussed the topic of drafting a will and 10 things young families should think about when drafting an estate plan on 1150 AM KKNW which you can listen to here:
(1) What Goes into Drafting a Will and Do I Need One?
As a general rule of thumb, everybody should have a will. This is a legal document that allows you to name a personal representative to handle your affairs when you are gone, it can provide for specific gifts to individuals or organizations, it can include a testamentary trust provision that states a trust shall be created for the benefit of minor children and will include your estate assets and it will name a guardian(s) for your minor children and trustee for your testamentary trust.
Having a will makes it so that your assets are administered per your wishes and can make sure that your children are taken care of. It also takes the burden off of your family to try and determine how you would have wanted your assets distributed. If you don’t have a will and die intestate (without a will) then all of your assets will be administered per Washington state law.
(2) Who Should I Name as My Personal Representative?
The person that you name as your personal representative should be somebody that you trust will handle your affairs per the instructions set out in your will. This is typically a spouse or a sibling but you may name anybody you wish. It is advisable to name a primary person and then one or two backup options in case the personal representative you name is unable to serve.
(3) How Does a Testamentary Trust Work?
A testamentary trust is simply language placed into a will that instructs the personal representative to set up a trust, most likely for children, should they pass away. The trust provision can include language that can restrict how any testamentary funds are to be distributed and shall name a trustee to manage the trust and all the beneficiaries. It is important to think about how you want these funds to be used such as most families like to put restrictions on the trust funds such as they may be used for education and support but not until a certain age are all the funds distributed to a beneficiary.
(4) Can I Disinherit People in My Will?
Yes, you can place restrictions in your will that can specify certain people shall not receive any benefit from your estate as well as limit who can serve as a personal representative or trustee of your estate or testamentary trust.
(5) Do I Need a Separate Trust Set Up Now?
For most young families the answer is no. If assets are placed in a trust before an individual’s passing, then they do not have to pass through probate. Probate is the process of administering assets and paying debts in a court proceeding. Anybody with more than $100K in probate assets upon their death must go through probate in Washington State. Things like life insurance proceeds or assets placed in a trust do not have to go through probate which is beneficial as probate is the process of distributing assets and paying creditors under a court proceeding which can delay family members from receiving assets in a timely fashion.
Furthermore, with regards to real estate, families can record a transfer on death deed which would transfer a property upon death and also avoid probate. For high net worth individuals there may be tax benefits to creating a separate trust or if you want anonymity with regards to your estate a separate trust may be a good idea and trust docs are not filed in court for public viewing.
(6) What is a Durable Power of Attorney?
A durable power of attorney is a legal document that allows you to act on ones behalf if they become incapacitated. This usually applies to being able to access bank account and handle ones personal affairs. If somebody passes away, however you may need to open a probate case to get testamentary letters to access accounts, transfer title in real estate or gain access to a safety security box.
(7) What is a Medical Power of Attorney?
A medical power of attorney names an individual to act on your behalf when it comes to making medical decisions. You may want this person to be different than your personal representative for various reasons such as training in the medical field or being more compassionate when it comes to handling your medical affairs.
(8) What is a Health Directive?
A health directive specifically advises under what situations the hospital shall stop administering life saving health care. For instance, if you are in a coma with no brain activity do you want them to continue life support or not? When you sign a health directive it should be in the presence of two witnesses. Once, again this reduces the burden for loved ones in an already difficult time.
(9) What If I Don’t Have Assets of More than $100K?
If you don’t have assets of more than 100K at the time of your death, then your estate can avoid probate and your heirs can sign a small estate affidavit to administer your estate in order to close out accounts and distribute funds accordingly. If you had a will, it will still need to be filed with the Superior Court in the County where you lived. Nevertheless, it is still advisable to have a will so that you can name a personal representative to handle your affairs and give specific gifts to any beneficiaries you see fit, otherwise the state will make these decisions for you.
(10) Should I have an Attorney Draft My Estate Planning Documents or Do It Myself?
With all the technology and do it yourself services out there you are probably thinking you can handle drafting your estate planning documents on your own. I don’t blame you, but it is just like any other legal matter where you could represent yourself or hire an attorney. Having an attorney will allow you to get all your questions answered during the process and have peace of mind that the documents are being drafted correctly. If you create the documents on your own, you may save a few dollars, however you will need to be careful that the laws cited in the documents apply to your state and that they are doing what you intend them to do. At the end of the day, hiring an attorney isn’t crazy expensive as most estate plans can be created for between $1,000 – $2,500 for the docs listed in this article.
If you live in Washington State and are looking for assistance in drafting a will or an estate plan, give Symmes Law Group a call at 206-682-7975 to speak to an estate planning attorney and learn about your options.