Idaho Clients, Colleagues, Family & Friends - I will be in Boise Nov. 4-6 and have some time to meet with new or existing clients on Friday the 4th, before the BSU/San Jose State game. Give us a call at 253.858.5434 to set something up.
Over the past 20 years, we have served as general counsel to nearly 100 small businesses, nonprofit organizations, churches, a municipal utility district, and a couple rock & roll bands. The role of general counsel varies depending on the organization that they serve. Minimally, the general counsel is responsible for trying to assure that the organization is acting within the law. However, businesses and nonprofits are turning more and more to the general counsel to provide advice that goes beyond legal compliance. A proposed course of action may raise reputational issues for the organization. The general counsel is expected to spot such issues and have a view about them.
The general counsel provides advice on the legal environment and legal responsibilities. Their knowledge of how the legal environment is developing should give the general counsel a basis on which to give valuable advice in planning transactions or taking other business initiatives. For the general counsel to be an effective counselor, the organization's managers must be sure that the general counsel is included early in the planning and decision-making process, and is viewed as a partner in the business process. General counsel should help mold these transactions or initiatives so that they meet legal requirements and do not transgress into areas that would damage the organization's reputation.
If you own a small business, manage a nonprofit organization, or serve on your church's governing body and your organization can benefit from having a lawyer to regularly provide advice, negotiate and draft contracts or policies, or help with other legal needs, 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.
In 2013, Congress made certain estate tax provisions permanent, such as the exemption from estate tax for the first $5.45 million of one’s estate, indexed annually for inflation. There has been no such clarity on the state levels, which remain a patchwork of different estate tax laws. So, depending on the value of your estate, and your residence, your estate may owe considerable state estate tax even if it is exempt from federal estate tax.
There are various strategies that estate planning lawyers use to lower clients' taxable estate on both federal and state levels. Some of the strategies proven to reduce estate taxes are:
GRAT – If you contribute assets into a Grantor Retained Annuity Trust, you could receive a regular payment akin to an annuity over many years, and then when the trust term ends, the appreciated assets pass to your heirs, are not considered part of your estate, and will not be subject to estate taxes.
QPRT – If you contribute your personal residence into a Qualified Personal Residence Trust, you may still live in the residence for a term of years, and when the trust term ends, the home is removed from your estate while passing to your heirs and will not be subject to estate taxes.
FLP – After contributing your assets into a Family Limited Partnership in return for general and limited partnership interests, you may then, over time, gift your limited partnership interests to your heirs while retaining the general partnership interest (thereby continuing to control the FLP), and thus remove the value of the limited partnership interests from your estate. FLPs also provide the additional bonus of excellent asset protection.
CRUT – By contributing appreciated assets to a Charitable Remainder Unitrust, you are entitled to a charitable deduction in the current tax year, regular payments from the trust back to you during the trust term, and at the end of the term the assets pass to the charity, are not subject to income tax and are removed from your estate.
ILIT - If you own or control a life insurance policy, the IRS deems its death benefit to be in your estate and subject to estate tax, even though you will never receive the death benefit during your life. If you contribute this life insurance policy to an Irrevocable Life Insurance Trust, you may remove the insurance policy from your estate. Your family members may receive the death benefit from the trust, free of any estate tax.
Dynasty Trust – Such a trust allows the preservation of assets for your descendants, along with offering asset protection from creditors, as well as delay of the estate tax for many generations. The trust can distribute income to beneficiaries, but principal is preserved, asset-protected and grows tax-free.
These strategies are not only for the super wealthy. We have successfully utilized these strategies for clients who are concerned with leaving as much of their hard-earned money for their family with as little as possible going to the IRS and state tax authorities. These are equally attainable goals with a $5 million estate as they are at $50 million. Moreover, these strategies are affordable, especially considering the amount of tax savings they offer.
Of course, if you want to move to Florida or Nevada (where they have no state estate tax), go for it. But if you’re considering a move for estate tax reasons, first consider these various strategies to lower your estate tax liability without having to relocate. Give us a call at 253.858.5434 if you, your family, friends, neighbors, or co-workers have questions about strategies for saving on estate taxes.
There are many misconceptions about the probate process. In some instances, avoiding probate may not be the right plan for your estate. Yet, some law firms and businesses market “probate avoidance” devices like revocable living trusts. These are difficult to maintain and even if you have one of these trusts, you will not always be able to avoid probate of your estate.
MISCONCEPTION 1: PROBATE SHOULD BE FEARED AND AVOIDED. It is true that, in some states, probate can be an onerous and expensive process. Fortunately, it's not like that in Washington or Idaho. Probate in these states is much easier than it is in other states, and often the appropriate process for administering your estate. It can be necessary and helpful in situations where a Supplemental Needs Trust needs to be established for a surviving spouse or disabled child who requires long-term care or receives public benefits. The effect of creation of this trust is to provide immediate protection for at least one-half of a couple’s estate.
Complicated estates with considerable property are often best handled via probate. If your estate needs creditor protection or there is dissension among your heirs and beneficiaries, the third-party oversight of the court and probate law will minimize difficulty for your estate.
MISCONCEPTION 2: PROBATE IS ALWAYS A LONG, DRAWN-OUT PROCESS. Many people believe that “probate” is synonymous with lengthy court proceedings. This is usually not true. Depending on the language of your Will or if the court allows, your Personal Representative can serve with nonintervention powers, which means with legal authority to act without court oversight unless necessary.
Sometimes the length of probate depends on whether it is desirable to utilize the benefits of the state’s creditor protection law, which requires your Personal Representative to notify reasonably ascertainable creditors of the impending probate proceedings, but restricts the amount of time they have to present their claims to four months from the notice. A typical probate in Washington or Idaho should last six to nine months.
If you have questions about the probate process, give us a call at 253.858.5434 to find out how we can help.
Each year, over 3 million people suffer "whiplash" injuries to their neck and back as a result of auto collisions. About 50% of these injury victims will fully recover, while some 40% will suffer chronic pain, and about 10% will be disabled.
One reason whiplash injuries are so prevalent is due to the rigid vehicle bumper systems on vehicles which are intended to reduce property damage in the event of a collision. However, in a collision, this causes energy to be transferred from the vehicle to its occupants, often resulting in a forceful back-and-forth movement to a person’s neck or back. A whiplash injury results when your neck or back cracks like whip, causing sudden and violent flexion and extension of the spine, as well as the muscles, tendons, and ligaments that support the spine. Most often they are caused by rear-end auto collisions.
Whiplash injuries should be taken very seriously. Usually, you will not know the extent of your injuries until weeks or months after a crash. Sprain and strain injuries, which are often known as "soft tissue" or "connective tissue" injuries usually heal within a few months. Pain that lasts longer is frequently a result of more serious problems such as a bulging or herniated disc, nerve damage, or other spinal injury.
We have nearly 20 years' experience representing people who have suffered neck and back injuries in auto collisions. Call us at 253.858.5434 to set up a free initial consultation to talk about your case.
We offer legal services for the life of a small business. We help you navigate the road ahead and spot issues coming around the bend, so you can focus on your clients and customers. We'll talk to you like a friend or colleague—not like a student in a lecture hall. We use plain language; we leave the legal jargon out of the documents we prepare, so you understand what we put together for your business. And we work with flat rates, so you know ahead of time what our legal services will cost - that way, we can get to know you and your business without you feeling like you’re on the clock.
We frequently provide legal services to new businesses like:
* Advising on choice of entity
* Forming the company
* Drafting governing documents
* Drafting employment and independent contractor agreements
* Protecting trademarks and other intellectual property
* Drafting contracts
* Reviewing and negotiating commercial leases
* Drafting website policies
If we can be of service to you, your family, friends, neighbors, or co-workers, 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.
Most parents choose to leave their estates equally to their children. But sometimes, parents intentionally choose to not leave anything to one or more of their children. They may think they have legitimate reasons, like one child has been more financially successful than the others, or not wanting a special needs child to lose government benefits, or not wanting to leave an inheritance to a child with an addiction problem. And sometimes, sadly, a parent wants to disinherit a child who is estranged from the family, or to use disinheritance as a way to get even and have the last word.
But regardless of the reason, disinheriting a child can be hurtful. It's permanent and will undoubtedly affect that child’s relationship with their siblings. Courts are full of siblings who sue each other over inheritances; even if they don’t sue, it is unlikely they will be having family dinners together. Finances aside, there is symbolic meaning to receiving something from a parent’s estate.
Disinheriting a child may be short-sighted and even completely unnecessary. For example:
* A child who appears to be more successful financially may have trouble behind the scenes. This child may actually need the inheritance now or in the future; fortunes can change quickly, marriages can break up, and people can get sick. Consider that if you disinherit this child, you also disinherit your grandchildren by this child, unless you make specific provision for them in your estate plan.
* You may have a child who is physically, mentally or developmentally disabled who may be entitled to government benefits. Most of these benefits are available only to those with minimal assets and income. But you do not have to disinherit this child. You can establish a Special Needs Trust that is carefully designed to supplement and not jeopardize the benefits provided by local, state, federal or private agencies.
* You may have a child who is irresponsible with money or has an addiction problem. Consider that this child may actually need financial help now or in the future, and may eventually become a responsible and/or sober adult. Instead of disinheriting this child, you can set up a trust and give the trustee discretion in providing or withholding financial assistance.
How you choose to include your children in your estate plan says a good deal about your values and character. Not disinheriting a child who has caused you grief and heartache can convey a message of love and forgiveness, while disinheriting a child, even for what seems to be good cause, can convey a lack of love, anger, and resentment.
If you have previously disinherited a child in your Will or trust and you have since reconciled, you need to update your plan immediately. If your decision to disinherit a child is final, be sure to discuss it with your lawyer; they will know the best way to handle it in your estate plan. Finally, tell your child that you are disinheriting them so it doesn’t come as a complete surprise. Explaining your reasons will allow for honest discussion, may help deter the child from blaming siblings later, and may prevent a costly court battle.
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.
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.
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.
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.
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.
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.
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.
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.