Using TEDRA to Resolve Trusts & Estates Disputes

When a loved one passes away, disputes over the distribution of assets may arise, straining relationships and leading to drawn out court proceedings. In 2000, the enactment of the Trust and Estate Dispute Resolution Act ("TEDRA") brought significant changes to the way that dispute resolution procedures are handled for trusts and estates in Washington.

If you ever have a dispute regarding a trust or estate that you’re unable to resolve, you could file a TEDRA petition to reach a resolution in a timely and efficient manner without litigation. TEDRA is used to resolve a wide range of disputes relating to Wills, trusts, and estates, such as the following:

* The interpretation of Wills and administration of estates;
* The possible reformation of a Will or Trust Agreement;
* The validity or existence of a Will;
* Claims of a surviving spouse or child who is not provided for in a Will;
* Third-party claims against an estate
* The validity of the transfer of assets prior to death; or
* Intestate succession without a Will.

TEDRA has given lawyers a clear framework for managing conflicts. TEDRA is intended to allow expeditious, complete, and final decisions to be made in disputed trust, estate, and non-probate matters. TEDRA provisions can help you resolve disputes through mediation, arbitration, and agreement.

First, the parties may meet voluntarily to discuss their differences. If they reach an agreement, they can write and enter into the agreement before the court. Parties to a TEDRA petition can easily reach a voluntary, non-judicial resolution of trust and estate matters by entering into an agreement signed by all parties. A TEDRA agreement is a legally binding contract that governs disputes between interested parties. The agreement can be kept confidential from the public as well as successor beneficiaries.

If the parties cannot come to an agreement, they can negotiate through TEDRA mediation and arbitration. An interested party can commence TEDRA mediation or arbitration by filing a summons and petition, identifying the dispute and seeking relief. In mediation, the parties negotiate a resolution with the help of a trained mediator. If mediation fails, a party may file and serve a notice of arbitration on all parties involved. In arbitration, the parties involved must submit their arguments to an arbitrator, who then issues a decision regarding the resolution of the dispute. Any party may appeal the arbiter’s decision to the court.

If you are considering filing a TEDRA petition, give us a call at 253.858.5434. Although you don’t need a lawyer to enter into a TEDRA agreement, a lawyer can help ensure that your interests are adequately represented and protected. Including all necessary provisions in a TEDRA agreement is crucial to preventing problems and future litigation.

Why Hire a Lawyer Following an Auto Collision?

Auto collisions are traumatic - particularly when someone else is to blame. You have the shock of the crash itself, but may also be left with serious injuries and a damaged or destroyed vehicle. We can help you deal with the aftermath and get you the compensation you deserve. When victims of auto collisions hire us to represent them, we can:

* Look at the evidence surrounding the collision, review police reports, and interview witnesses;

* Assess the total cost of your collis...ion, including medical treatment, lost wages, the cost to repair or replace your car, as well as pain and suffering and other "general damages;"

* Talk to the other driver's lawyer or the driver's insurance company in an effort to negotiate a settlement;

* File a lawsuit against the other driver if a settlement can't be reached; and

* Represent you in court.

There are several reasons to hire a lawyer, rather than trying to represent yourself. We have experience handling personal injury cases and know the laws regarding auto collision and injuries. We understand how to value your claim and are comfortable negotiating a settlement or representing you in court. Perhaps the biggest benefit: When you're represented by counsel, the other side can take you and your claim more seriously.

If you or a member of your family, friend, neighbor, or co-worker, has been injured in an auto collision and needs legal help, give us a call at 253.858.5434 for a free initial consultation.

Choosing the Right Business Entity for Your New Business

When you're starting a new business, you need to consider what type of entity you're going to form. C corps, LLCs, and S corps differ significantly in the areas of taxation, ownership, fundraising, governance and structure, and employee compensation. Almost all technology startup companies that we work with are C corps. Any company that raises venture financing will need to be a C corp in order to issue preferred stock.

If founders want the benefit of flow-through tax treatme...nt with respect to losses prior to an outside financing, an S corp election may make sense as long as there are no entity or non-U.S. citizen/resident stockholders. However, S corp losses can only be used to offset personal income up to the founders’ basis in the S corp stock, which may decrease the utility of the S corp election. In any event, the S corp election can be easily revoked at the time of a financing. The legal documentation for an S corp is basically identical to an C corp.

We generally avoid LLCs for technology startup companies that need to grant options to employees, and there is not really an easy method to do this. In addition, the conversion of an LLC to a C corp results in additional legal and accounting expense. However, we do like to use LLCs for other types of businesses because of their flexibility.

If you or one of your friends, family members, neighbors, or co-workers is thinking of starting up a new business, give us a call at 253.858.5434 to see how we can be of service. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Using Instruction Letters as Part of Your Estate Plan

Your Will is one of the most important documents you will make when planning your estate. Without it, disputes among family members often arise, and some property may even be given to the state if no heirs can be found. But another, informal document--an "instruction letter"--can go a long way toward providing additional clarity for your beneficiaries and the Personal Representative of your estate.

While this letter is not a legal document, inclusion of certain elements can h...elp make the estate process go more smoothly. For instance, the PR needs to know where to find certain documents or how to log into certain online accounts. In addition, an instruction letter should cover three main areas:

* Funeral Wishes (whether you have already reserved and/or paid for a plot; if requesting cremation, where you would like your ashes spread; whether you would like to donate your body or tissues)

* Financial Details (assets, both monetary and otherwise; any outstanding debts; contact information of employers or financial planners)

* Personal Effects (where certain items are located; how to care for pets; personal messages to your survivors)

Specific items to include in your letter of instructions:

1. The location of your original Will.

2. Complete instructions for the burial/cremation.

3. Exhaustive list of friends, relatives, and others who should be contacted upon your death.

4. The location of all important documents, such as deeds, divorce papers, birth certificate, any other legal documents and records.

5. Any information related to membership in societies, lodges, or other such organizations. Many of them offer death benefits for named beneficiaries.

6. Where documents related to life insurance may be found, name of insurer(s), policy number(s), etc.

7. All bank account information, including the names of banks and account numbers.

8. A listing of any U.S. Savings Bonds (include names, denominations, and serial numbers).

9. A listing of any stocks or bonds (and where they can be found).

10. Any pension plan information.

11. Income tax returns, both state and federal, from the past few years.

12. A statement regarding your reasons for any unusual gifts or percentages of gifts given in your Will.

13. Location of any outstanding or recurring bills, plus a list of any outstanding personal debts.

14. Where bills and records of payment are located.

15. Any large gifts that you have given in the past few years.

Of course, the content of any instruction letter will vary according to each individual's unique needs. The main goal is to help your PR and your beneficiaries handle the process as smoothly as possible. If you have questions about prepare an instruction letter or any other aspect of estate planning, give us a call at 253.858.5434 to see how we can help. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Duties of a Personal Representative

A Personal Representative (a "PR" or also called an "Executor") of an estate is an individual or institution appointed by the Court to administer the estate of a person who has died. As a fiduciary, a PR must settle and distribute the estate of the decedent as efficiently as possible by following the directions outlined in the Will and the probate laws of the state where the estate is being administered.

The PR's primary duty is to protect the estate in a manner consistent with the decedent’s wishes. Although this may appear relatively simple, it is important that the PR understand the responsibilities associated with the position. As a word of caution, failure to adhere to these duties and responsibilities can result in the filing of lawsuits against the PR for breach of fiduciary duty.

Generally speaking, a PR is responsible for identifying the assets of the estate, protecting the estate property, giving notice to interested parties (heirs, creditors, and taxing authorities), preparing an inventory, paying valid claims (including debts and taxes) against the estate, representing the estate in claims against others, and distributing the estate property to the beneficiaries.

If you have been named as PR of someone's estate or have questions about probate in general, give us a call at 253.858.5434 to see how we can help.

Seattle Meetings on 6/3 and 6/6

Clients and Colleagues - I will be working in Seattle this Friday (June 3rd) and Monday (June 6th) and have a couple time slots available for meetings both afternoons. If you would like one, give us a call at 253.858.5434 to set something up.

Forgiving Loans in Your Will

Many parents make loans to their children, e.g., to buy or house or to start a business. In your Will, you can leave instructions for forgiving these debts after your death. When you do, your forgiveness functions much the same as giving a gift; those who were indebted to you will no longer be legally required to pay the money they owed. Keep in mind, however, that releasing people from the debts they owe you may diminish the property that your other beneficiaries receive und...er your Will.

Two caveats for forgiving debts in your Will are:

* You may not be able to use your Will to forgive debts if your estate is insolvent. If there isn’t enough money in your estate to pay your own debts, you may not be able to forgive debts owed to you.

* If you made the loan while you were married, you may only have the right to forgive half the debt. Washington and Idaho are both community property states - if the debt is owed to your marital community, you cannot cancel the whole amount due unless your spouse agrees to allow you to cancel his or her share of the debt—and puts that agreement in writing.

When you make your will, carefully describe any debt you wish to cancel, including the name of the person who owes it, the approximate date the debt was incurred, and the amount you wish to forgive. This information is important so that the debt can be properly identified.

Although forgiving a debt is likely to come as a pleasant surprise to those living with the expectation that they must repay it, do not use your Will to explain why you are forgiving the debt. Instead, explain your reasoning in a separate letter that you keep with your Will.

If you have questions about forgiving debts owed by your children (or others) in your Will, or other questions about estate planning or probate, give us a call at 253.858.5434 to see how we can help. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Seattle Meetings on 5/20/16

Clients and Colleagues - I will be working in Seattle all day on Friday (May 20th) and still have a couple time slots available for meetings in the afternoon. If you would like one, give us a call at 253.858.5434 to set something up.

Uninsured Motorist (UIM) Insurance Claims

What do you do if you have been involved in an auto collision and the other driver just ran away or does not have insurance? What if you were a pedestrian or riding a bike and were hit by a driver who drove off or does not have any auto insurance? What should you do?

Fortunately, there may be a solution. If you have uninsured motorist or underinsured motorist (UIM) coverage on your auto policy, you will be able to make a claim against your own insurance company for your losses without any detriment to you. Even if you personally do not have auto insurance coverage, you still may be covered. For example, if you were a passenger in someone else's car and the owner of the vehicle you were in has UIM coverage, it should cover you. If you live with someone who is related to you who has UIM coverage, it also may cover you. Even if you are a pedestrian or bicycle rider, if you or a relative you live with have UIM coverage, it may cover you. If you think any of these may apply, be sure to tell your lawyer right away.

The UIM insurance company pays when the other driver doesn't have any (or enough) insurance. UIM insurance coverage covers the following losses:

* Ambulance, paramedic, hospital and medical bills, including dental, x-ray, MRI, and prescriptions;
* Loss of wages, earnings, and income;
* Pain, suffering, disfigurement, emotional distress, and loss of enjoyment of life activities; and
* Loss of future earnings and earning capacity.

Are you worried about making a claim against your own insurance company? You should not be! Remember, UIM coverage is not a gift from your insurance company. You already paid a premium for it, so don't think you're taking advantage of your insurance company or doing anything wrong because you have to make an UIM claim. You also don't have to worry that your premium will go up if you make a UIM claim since most states prohibit premium increases if the collision was not your fault.

If we can be of service to you, your family, friends, neighbors, or co-workers, give us a call at 253.858.5434 to set up an appointment for a free initial consultation.

Trusts and Financial Institutions

Trusts have been around a lot longer than the modern banking system. Yet this month, we've had two banks (well, one mortgage lender and one credit union) who act like they've never heard of a Revocable Living Trust or a Special Needs Trust and can't seem to figure out just how Trusts operate, much to the detriment of their customers/our clients.

If you've set up a Trust, or you're Trustee of a Trust for someone else's benefit, and you're getting flack from a bank about setting up accounts, investments, or transferring assets, give us a call at 253.858.5434 to find out how we can help you "educate" these financial institutions to do right by their customers.

Seattle Meetings on 5/13/16

Clients and Colleagues - I will be working in Seattle all day on Friday (May 13th) and still have a couple time slots available for meetings in the afternoon. If you would like one, give us a call at 253.858.5434 to set something up.

Will Contests

A Will can always be contested, but the result can be uncertain. You have to have a basis to contest a Will; you must show that there is either something wrong with the Will or that there was something wrong about the conditions under way the Will was made. For example, you can challenge a Will by claiming that:

* the Will does not meet formal requirements, such as proper signatures or witnesses;
* the person signing the Will did not have the capacity to make a Will; or
* the person signing the Will did so under suspect conditions, like fraud, mistake, or undue influence.

If the Will you want to contest includes a “no contest” clause, you may risk losing any inheritance the Will provides to you. Many Wills contain a no contest clause which says something along the lines of “I disinherit anyone who challenges this Will.” No contest clauses are meant to discourage Will contests by disgruntled heirs.

In reality, however, good faith challenges are rarely thwarted by a no contest clause. So if you have good reason to contest a Will, a no contest clause shouldn’t deter you. Also, the likelihood of a court upholding a no contest clause varies greatly by state and by circumstance. So just because a Will has a no contest clause doesn’t necessarily mean it will be enforced.

A more practical risk to a Will contest is the time and money that it will cost to mount the challenge. To challenge a Will, you’ll need to hire a lawyer and pay court fees. And the issue will likely take months, if not years, to resolve. Will contests are complicated and you will need the help of an experienced lawyer. Give us a call at 253.858.5434 if we can be of service to you, your family, friends, neighbors, or co-workers.

Boise Meetings, May 26th and 27th

Idaho Clients, Colleagues & Friends - I'm going to be in Boise May 25-29 and have time to meet with new or existing clients on Thursday the 26th or Friday the 27th. Give us a call at 253.858.5434 to set something up!

Handling Wage Garnishments for Small Businesses

Handling an employee's wage garnishment can be challenging for small business owners. When notified of the need to garnish wages by a court, business owners aren't always clear on their responsibilities and obligations.

A wage garnishment is any legal procedure where some portion of a person's earnings is withheld by an employer for the payment of a debt. Situations that incur wage garnishment typically include judgments, child support, and unpaid taxes.

When an employer receives a Writ of Garnishment, the employer is obligated to make the appropriate deductions from the employee's wages and direct payments to a designated agency or court. Wage garnishments are time-sensitive and failure to timely process the garnishment can lead to penalties.

Having your business's lawyer help you process an employee's wage garnishment can protect you against undue liability and lawsuits. We can help you interpret the Writ of Garnishment, accurately calculate the deductions, and assure that payment is timely made to the appropriate agency or court. Give us a call at 253.858.5434 to find out how we can help!

7th Anniversary Party

This weekend marks the 7th anniversary of the founding of the Law Offices of P. Stephen Aita, PLLC, so if you're in the Tacoma/Gig Harbor area around 6:00 this Friday, April 29th, come to 7 Seas Brewing Co. (3006 Judson Street in Gig Harbor) and join us in raising a glass to seven great years!