Transfer on Death Deeds ("TODDs")

In 2014, Washington joined more than 20 states and D.C. in authorizing Transfer on Death Deeds ("TODDs"). A TODD offers a non-probate method of transferring an interest in real estate to one or more beneficiaries at the death of the property owner and thus can be a useful estate planning tool for those seeking to avoid probate. A TODD does not transfer any interest in the property until the owner's death and is fully revocable during the owner's lifetime as long as the owner has testamentary capacity. The TODD must: (1) contain the essential elements and formalities of a properly recordable deed; (2) state that the transfer to the designated beneficiary is to occur at the transferor's death; and (3) be recorded before the transferor's death in the public records in the office of the auditor of the county where the property is located.

If you have questions about Transfer on Death Deeds or other probate avoidance or estate planning techniques, give us a call at 253.858.5434 to see how we can help.

Semi-Annual Estate Plan Reviews

Guess what we're spending the day doing? Every October 31st and April 30th, we review our estate planning files and send review letters to clients. We review these files so that we can alert clients as to changes in state and/or federal laws which could affect them and indicate a need to update their estate plans. We recommend that clients regularly examine their estate plans and suggest such review be made at least once every 3-4 years, and more often if major changes in family size, relationships, or assets should occur.

If you would like a copy of our checklist of changes or occurrences that might warrant a change in your estate plan or if you think your estate plan should be reviewed or changed in any way, call us at 253.858.5434 for an appointment so that we can meet to discuss your needs and revise your estate plan accordingly.

Probate Overview

Probate is the legal process that is often required after someone dies. Probate gives someone, usually the surviving spouse or other family member, authority to gather the deceased person’s assets, pay debts and taxes, and eventually transfer assets to the people who inherit them. Probate in Washington and Idaho typically takes 6 months to a year, depending on some choices the Personal Representative ("PR") makes. It can take much longer if there is a fight over the Will or unusual assets or debts that complicate matters.

In broad overview, the PR's job is to: (1) collect and inventory the deceased person's assets and keep them safe; (2) pay valid debts and taxes; and (3) distribute the remaining property as the Will (or if there's no Will, state law) directs.

The PR should keep careful records of how estate assets are handled and distributed. The PR should also inventory estate assets and estimate their value, but the inventory does not have to be filed with the court unless an interested person requests it. Usually, the PR opens a checking account for the estate, and uses it for amounts that come into the estate and to pay estate expenses.

The PR has authority over any assets that go through probate. Probate assets can include real estate, bank and brokerage accounts, and personal belongings (for example, vehicles, jewelry, home furnishings, and art). Life insurance proceeds that are payable to the estate (not a named beneficiary) are also probate assets.

If the deceased person owned real estate in another state, the PR may need to conduct a second probate proceeding in that state. That’s called an "ancillary probate."

In Washington and Idaho, PRs can choose whether or not to publish formal notice to creditors. If the PR does publish the notice, and also sends it to all known creditors, creditors will have just 4 months in which to make claims against the estate. If they don’t, their claims will be barred. Otherwise, creditors have 2 years from the date of death in which to bring claims. A PR who is concerned about claims coming in later usually chooses to publish notice.

If there’s not enough money in the estate to pay all debts, the PR must turn to state law, which prioritizes claims. The family allowance has the highest priority, followed by probate expenses, funeral costs, and taxes. It’s also the PR's responsibility to file final income tax returns for the deceased person. These returns are generally due by April 15 of the year following the year of death. Income tax returns may also be required for the estate itself. A federal estate tax return will be required only if the taxable estate is very large—for deaths in 2016, the limit is $5.45 million. More than 99.7% of all estates do not owe federal estate tax.

The PR can distribute estate assets to beneficiaries only after debts and taxes are paid. The PR follows the instructions in the Will, or if there is no Will, turns to state “intestate succession” law to determine who inherits. A PR who has paid all debts, filed the required tax returns, and distributed all the estate assets formally requests the court to close the probate case. The process is simple if the personal representative gets all the heirs and beneficiaries to sign a Receipt and Waiver document. If they don’t, the personal representative will have more notices to give and documents to file.

If you have questions about the probate process in Washington or Idaho, give us a call at 253.858.5434 to see how we can help.

Representing Clients in Personal Injury Cases

A major part of our practice includes personal injury work on behalf of injured people or their survivors. We emphasize careful and swift pursuit of injury claims. These claims are often the result of automobile collisions or other types of negligence situations. Although we will always seek to prepare and structure a case for settlement, the filing of a lawsuit is often necessary.

As trial attorneys, we aggressively and efficiently follow the court rules to move a lawsuit as quickly as possible to jury trial or settlement. We place a high priority on complete, careful, factual, and expert evaluation of our clients’ claims.

We have made the commitment to handle a substantial number of cases on the basis of “no recovery—no fee.” We believe that people who are injured and possibly unable to work or afford attorney fees have a right to legal representation and access to the judicial system in order to recover adequate compensation for their personal losses.

If you or a family member, friend, neighbor, or co-worker has been injured in an auto collision and needs legal advice to deal with their claim, give us a call at 253.858.5434 to see how we can be of service.

How Lawyers Can Help Small Businesses

It's easy for small businesses to gloss over hiring a lawyer because other matters, such as marketing and operations, seem more pressing. Many legal issues may not be of immediate concern to small business owners who easily justify holding off on paying for these services. However, there are many ways that lawyers can help small businesses.

BUSINESS FORMATION.

Some of the most important matters are handled at the beginning of the business. For example, you may want to structure your business in a way that limits personal liability. Lawyers can help with the process of incorporation so that you are assured that your business starts on strong legal footing.

CORPORATE GOVERNANCE.

Even if businesses use a lawyer to help incorporate the business, they may fail to maintain this status. A lawyer can advise clients to have annual shareholder, director, or partner meetings in order to maintain this status. Likewise, certain types of businesses must record minutes and elect officers according to their state’s requirements. Failing to take these steps can have disastrous consequences for the business. If sued, the business stands to have its corporate veil pierced and exposes corporate officers to personal liability.

EMPLOYMENT AGREEMENTS.

While many businesses start as a single-person operation, many small businesses owners quickly learn that they need some help for their business to thrive. A lawyer can assist their clients by helping to draft employment agreements, including non-disclosure agreements, employment contracts for a specific duration and non-compete agreements. The last group mentioned often requires very specific catering to detail. Every state has specific rules regarding the duration of a non-compete agreement, the geographical proximity of such a contract, and the scope of the agreement.

CLIENT CONTRACTS.

As the business continues to grow and become more successful, it will take in new clientele. To protect the business, a lawyer may draft specific agreements between the business and the client. By having the terms written upfront, disagreements and misunderstandings can potentially be avoided.

COLLECTIONS.

When customers stop paying their bills, small businesses and their cash flow system can become crippled. A lawyer can help in collecting past-due accounts.

Even if a small business owner determines that going to small claims court is faster and cheaper, a lawyer may walk the client through this process and provide advice about how to present evidence and support the case.

If you are a small business owner and need legal advice in keeping your business running smoothly, 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.

Using a Special Needs Trust to Protect a Disabled Loved One's Benefits

If you have a child or grandchild with a disability and you want to leave them money or property, you must plan carefully. Otherwise, you could jeopardize their ability to receive Supplemental Security Income (SSI) and Medicaid benefits. By setting up a "Special Needs Trust" in your Will, you can avoid some of these problems.

Owning a house, car, furnishings, and normal personal effects does not affect eligibility for SSI or Medicaid. But other assets, including cash in the bank, will disqualify your loved one from benefits. For example, if you leave your loved one $10,000 in cash, that gift would disqualify your loved one from receiving SSI or Medicaid.

A way around losing eligibility for SSI or Medicaid is to create a Special Needs Trust. Then, instead of leaving property directly to your loved one, you leave it to the Special Needs Trust. You choose someone to serve as trustee, who will have complete discretion over the trust property and will be in charge of spending money on your loved one's behalf. Because your loved one will have no control over the money, SSI and Medicaid will ignore the trust property for program eligibility purposes. The trust ends when it is no longer needed--commonly, at the beneficiary's death or when the trust funds have all been spent.

The trustee cannot give money directly to your loved one--that could interfere with eligibility for SSI and Medicaid. But the trustee can spend trust assets to buy a wide variety of goods and services for your loved one. Special Needs Trust funds are commonly used to pay for personal care attendants, vacations, home furnishings, out-of-pocket medical and dental expenses, education, recreation, vehicles, and physical rehabilitation.

If you have questions about Special Needs Trust or other estate planning techniques to care for disabled or special needs family members, give us a call at 253.858.5434. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

The Right Way and the Wrong Way to Distribute a Decedent's "Stuff"

No one really wants to inherit their parents' shoes or toothbrush or underwear after they die (at least I don’t), but what about all the other personal items left behind? From jewelry, art, furniture and antiques, to china, silverware, dishes and mementos, everything is an object over which a fight can ensue between siblings.

Exactly who is entitled to a decedent’s stuff (referred to as “tangible personal property” in legal jargon) and how is it passed out after death? Well, there is a right way and a wrong way, and it’s hard to enforce the right way.

A FEW RIGHT WAYS:

Washington and Idaho both allow you to leave a separate list of personal property with instructions as to who should get each item, as long as your Will references the list and references the law. Your list can be handwritten or typed, but must be signed and dated.
The list should be of sufficient detail to effectively describe each item being given.

Technically, all other property is supposed to be inventoried and then distributed according to the terms of the Will. If the Will provides for specific items to go to specific people, then that must occur. If not, then the beneficiaries can discuss who wants what and the Personal Representative must make a final decision in the event of a conflict. Any property left over is sold and the proceeds from sale split evenly among the beneficiaries.

Or better yet, the parent or grandparent can give an item of personal property before death. This is ideal because (1) it prevents any arguments relating to the parent’s intent, and (2) it allows the parent or grandparent to enjoy the act of giving (and witness the excitement of receiving) the gift. It also ensures that the gift will be made.

THE WRONG WAY.

Imagine the decedent’s heirs going through his or her house and randomly taking personal objects without any authorization or direction. They refuse to follow the terms of the Will and they fail to wait until a PR is in place to sort out the details. Once a PR is in place, it's too late, the property is gone and trying to recover it is nearly impossible.

The problem with the wrong way to pass personal items is that (1) it happens all the time, and (2) it’s hard to prevent. It really depends on the people involved. Will they wait to play by the rules or are they just going to do what they like? And the costs involved in trying to recover personal property is far too high to justify doing it in most cases.

At a minimum, a PR should try to secure the decedent’s home as soon as possible and take possession of the personal items as quickly as possible. Of course, it’s not always so easy to know which personal items people will want. Sometimes it can be the least obvious item.

If you have questions about distributing tangible personal property as part of your estate plan, give us a call at 253.858.5434 to see how we can help.

Requesting Medical Records in Personal Injury Cases

Medical records are the focus of many personal injury cases, since the claimant is seeking compensation for injuries ("damages") from the at-fault party. Where the injured person sought medical treatment for physical injuries, the doctor or hospital will have records of all treatment and medical bills. And at some point in the claim or lawsuit, the injured person or the "other side" (the at-fault party) will want to see those medical records.

In your request for medical records, you must include certain personal information including the patient's name, SSN, date of birth, etc. You should also specify whether you want specific records, records during a certain date range, or simply all records. Your attorney can request the records if you give written permission that is signed and dated. The requests can be faxed or sent via U.S. mail. Most medical providers charge a fee to copy and send the records. Depending on the medical provider, you may be required to pay the fee before the records are released.

Each state has specific standards for acquiring medical records for a legal purpose. When drafting a medical records subpoena, you must be aware of state laws and the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) requirements.

There are several advantages to having all medical records relating to a personal injury case:
* It allows both sides to assess the physical injuries and the viability of a particular case;
* It provides proof of physical injuries;
* It helps to calculate damages sustained by the injured person;
* It allows a medical expert to analyze the records to determine the cause of the injuries or, in a medical malpractice case, to determine whether doctors exercised reasonable care; and
* It helps the alleged at-fault person avoid paying for preexisting injuries.

If you or a friend or family member has a personal injury claim and has questions about obtaining medical records as part of the claim, give us a call at 253.858.5434 to see how we can help.

Boise Meetings - Nov. 4-6

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.

The Role of General Counsel

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.

Estate Planning Tools and Techniques

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.

Misconceptions About Probate

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.

Representing Clients with "Whiplash" Injuries to the Neck and Back

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.

Legal Services for the Life of a Small Business

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.

Thinking Twice About Disinheritance

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.