How much does probate cost?

How much does it cost to probate an estate? The short answer is, it depends on a number of factors, but mostly how complicated the estate is. The major expenses of probate include:

(1) Court Fees. In Washington, the initial filing fee is $240. In Idaho, it's $166.
(2) Personal Representative's Fee. The Personal Representative (PR) may charge a fee for his or her services. Often this individual is a relative, and he or she may choose not to charge a fee. The fee has to be what is “reasonable” for the work performed.
(3) Posting a Bond. If a PR is asked to post bond, this is to insure that if the value of the probate property declines as a result of the executor’s misconduct, the bond will make the estate whole again. It is like an insurance policy. Obtaining such a bond can be costly and depends on the value of the property subject to the bond. It can be $500 or much more if it is a sizeable estate. If there is a Will and if it waives the bond requirement, then the Probate Court will often--but not always--waive the bond.
(4) Publication of Legal Notices. A publication fee is charged by the local newspaper, which announces the person’s death and how interested persons (creditors to whom the deceased owed money) can contact the attorney or PR. The cost depends on the area, but fees generally run between $150 and $600.
(5) Tax Preparer Fees. Depending again on the size of the estate, estate taxes may need to be paid. Tax preparer fees may run anywhere from a couple of hundred dollars to a few thousand dollars if the state is large or complex.
(6) Property Appraisals. An appraisal by a court-appointed independent third party (a probate referee) is sometimes necessary if there are real property or other non-cash (personal property) assets in the estate, such as jewelry, artwork, etc. The probate referee fee may be statutory or set by custom in the area.
(7) Attorney's Fees. This is usually the largest portion of probate fees. In Washington, our Supreme Court has dictated that attorneys have to either charge a flat fee or charge by the hour for probate work; we cannot calculate our fee as a percentage of the value of the estate. In Idaho, attorney's fees can be either a flat fee, an hourly fee, or a percentage of the value of the estate.

If you have questions about probate an estate, 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.

Benefits of Revocable Living Trusts

A revocable living trust can help assets pass outside of probate, yet allows you to retain control of the assets during your lifetime. It is flexible and can be dissolved at any time, should your circumstances or intentions change. A revocable living trust typically becomes irrevocable upon your death. You can name yourself as trustee and retain ownership and control over the trust, its terms, and assets during your lifetime, but make provisions for a successor trustee to manage them in the event of your incapacity or death. Although a revocable living trust may help avoid probate, it is usually still subject to estate taxes. It also means that during your lifetime, it is treated like any other asset you own.

Since trusts usually avoid probate, your beneficiaries may gain access to these assets more quickly than they might to assets that are transferred using a Will.

Other benefits of revocable living trusts include:

(1) Control of your wealth. You can specify the terms of a trust precisely, controlling when and to whom distributions may be made. You can set it up so that the trust assets remain accessible to you during your lifetime while designating to whom the remaining assets will pass after you die, even when there are complex situations such as children from more than one relationship.
(2) Protection of your legacy. A properly constructed trust can help protect your estate from your heirs’ creditors or from beneficiaries who may not be adept at money management.
(3) Privacy and probate savings. Probate is a matter of public record; a trust may allow assets to pass outside of probate and remain private, in addition to possibly reducing the amount lost to court fees and taxes in the process.

If you are interested in setting up a revocable living trust as part of your overall estate plan, give us a call at 253.858.5434 to set up an appointment. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

The Propaganda Behind "MIST" Cases

When you hear that someone got in a "fender bender" and they got "whiplash," what’s your first thought? For many people the answer is, “That guy’s faking it.” Brothers and sisters, welcome to MIST cases and the propaganda behind them.

MIST stands for “minor impact, soft tissue.” Launched in the mid '90s by insurance companies, the theory claims that it’s impossible to sustain a permanent or serious injury in a low-property damage or low speed collision. Almost all American insurers have adopted this theory, but there is very little scientific evidence to validate this claim.

MIST relies on the idea that the visible damage of the vehicles and occupant are closely linked. The fundamental assertion is that there is a direct relationship between the intensity of the impact, based on the change in velocity, and the rate of serious injury. However, variables such as stiffness and elasticity of vehicles, the interplay between seat design, occupant mass, occupant position, and vehicle dynamics are not taken into account by MIST. This means that there are serious issues with the MIST methodology.

The problem is that the claimant is being judged by what the car looks like or the extent of the impact rather than the real issue - the claimant's injury. In essence, insurance companies argue that there was no correlation between the collision and the injury sustained. Further, the insurance companies apply the same cookie cutter approach to all cases. In essence, you have insurance adjusters formulating an opinion without actually knowing the first thing about the victim’s injury. We often receive letters from insurance companies discussing the minor impact without inquiring as to the nature and extent of the physical injuries.

If you have been in a fender bender, are suffering whiplash-type injuries, and are getting the run around by the insurance company, give us a call at 253.858.5434 to make an appointment for a free initial consultation.

Why do new businesses need a lawyer?

Why do new businesses need a lawyer? At the most basic level, new businesses need lawyers to help them deal with three groups:

(1) The government. You don’t want to violate laws. You also need to be sure you are doing business in a way that doesn’t create unnecessary tax liability and that you pay the taxes you owe.

(2) Third parties and the public. It’s essential to make sure you take reasonable steps to control risk in your interactions with customers, suppliers, users, employees, and the general public.

(3) Each other. When multiple people form a company together, it’s best to establish the rights and expectations of the founders upfront in case there are disagreements down the line.

The most likely times for start-ups to get lawyers involved include:
* Incorporation and forming a business entity
* Hiring employees
* Negotiating contracts with customers and suppliers, including establishing terms of service for websites and license agreements for software
* Raising capital
* Obtaining patents (for some companies)

If you're starting a new business and need legal advice, give us a call at 253.858.5434 to make an appointment. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Probate Administrative Expenses vs. Creditors' Claims

When someone dies leavings property, debts, and a mortgage, and if they did not have a living trust, probate is required to sort everything out. Probate is the process of paying off the deceased person's final bills and expenses and transferring their property to their beneficiaries. Dealing with debts can begin before probate is officially opened.

You should make a complete list of the decedent's liabilities, even before the probate estate is opened. It will help streamline the probate process later. Bills and statements you should look for include:

* Mortgages
* Lines of credit
* Condo fees
* Property taxes
* Income taxes
* Car and boat loans
* Personal loans, including student loans
* Credit card bills
* Utility bills

After you've made a list of liabilities, divide them into two categories: (1) Liabilities that will be ongoing during probate--these will be administrative expenses, and (2) liabilities that can be paid off in full after the probate estate is opened--these are the decedent's final bills. Administrative expenses include the mortgage, condo fees, property taxes, storage fees and utility bills. These must be kept current until the estate closes. To the extent possible, the estate beneficiaries should pay these bills until the probate estate is opened. The deceased's final bills include income taxes, personal loans, loans against life insurance and retirement accounts, credit card bills and cellphone bills. The estate beneficiaries should not pay any final bills out of their own pockets, but should wait and let the estate's Personal Representative deal with them in the process of settling the estate.

The PR will be responsible for taking over payment of administrative expenses and settling the decedent's final bills after probate is open. This will include determining which debts are valid and to what extent, then assessing which, if any, of the decedent's assets should be liquidated or sold to pay ongoing estate expenses and final bills.

If the beneficiaries have continued to pay some or all of the decedent's bills prior to the probate estate being opened, the PR should then reimburse them accordingly, with one exception. If the decedent left real estate to a specific beneficiary in his Will and that beneficiary intends to assume or refinance the mortgage against the property, he should not necessarily be reimbursed

A beneficiary who inherits a house or other real estate may be able to assume the mortgage during or after probate according to the terms of the Garn-St. Germain Depository Institutions Act of 1982 (12 USC sec. 1701j-3). This federal law forbids lenders from calling loans due or foreclosing when ownership changes hands due to death. The mortgage must typically be current to qualify.

If you have questions about settling a decedent's estate and the payment of their final bills, give us a call at 253.858.5434 to make an appointment today.

Choosing Your Trustee

Trusts can be an excellent way to provide for your heirs or for causes that matter to you while also protecting the beneficiaries from onerous taxes or potentially controlling how the funds are distributed and spent. One important step in creating the Trust that best serves the needs of your loved ones is choosing the person you wish to serve as Trustee. Depending on the type of Trust you create, the Trustee will make important decisions about how to invest the Trust’s assets and how best to distribute them, so choosing the right person is critical.

The person you choose as Trustee doesn’t need to be a financial expert to be capable. It’s more important to find someone who understands the basics of sound investing strategies, but who also knows when to call in an expert in law or accounting or finance for support when they find themselves out of their depth. And most importantly, choose someone who is very trustworthy.

If you’re creating a Trust that you want to live on after you do, be sure that you choose someone who will likely be alive and capable after you die. Additionally, be sure to choose someone who will have the time to dedicate to looking after the Trust’s assets personally, and who won’t be forced to hand the task off to someone else who is not of your choosing.

Your first instinct may be to select a child or sibling to serve as your Trustee, since you know and trust them. While this might work for some Trusts and families, you should know about the risks involved in such a choice. Relatives may not be able to look at a decision objectively, due to their proximity to the family. Likewise, the relatives who weren’t chosen to serve as Trustee may feel hurt and resentful that they weren’t selected, and may be more likely to second-guess the decisions of the person chosen than they would those of an outsider. Consider someone who is familiar with your family and its needs, but who can remain objective in making difficult decisions.

If you are in need of guidance in creating an estate plan that best serves the needs of you and your heirs, contact us for a consultation 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.

Questions You'll be Asked During Your First Meeting with a Personal Injury Lawyer

If you've been injured in an auto collision and want to hire a lawyer to represent you regarding your injury claim, be prepared to answer the following questions during your first conversation with the lawyer:

1. When did the collision happen?
2. How did the collision happen?
3. Where did the collision happen?...
4. What injuries did you suffer?
5. How do you feel now?
6. Were there any witnesses and if so, what are their names and addresses?
7. What medical facility and/or doctors have treated you so far?
8. Do you have any insurance that may relate to this collision, like health, auto, PIP, uninsured motorist, or an umbrella policy?
9. Have you been in contact with any of the insurance companies involved? If so, what are the claim numbers and the names and phone numbers of the contact people?
10. Where are the cars that were involved in the collision?
11. Have any pictures been taken and if so, by whom and where are they?
12. Have you contacted any other attorneys up to this point?
13. Have you given a statement to an insurance adjuster and if so, what is their name and phone number?

Our law firm has a long history of representing injured people and their survivors. If you've been injured in an auto collision, give us a call at 253.858.5434 to make an appointment for a free initial consultation.

The Importance of Partnership Agreements

When you form a partnership to run a business, your partners will probably be family members, friends, or business associates. You may think it’s unnecessary to enter into a formal agreement with people you know well. Experience proves otherwise. No matter how great things are at the beginning, every partnership inevitably faces problems over the years. A well thought out partnership agreement will help you preserve the business, as well as your friendships.

If you don’t sign an agreement, you can still have a legally valid partnership. State law will dictate how your partnership is run. Every state except Louisiana has adopted either the Uniform Partnership Act or the Revised Uniform Partnership Act. States have sometimes made slight variations in these laws but there is a remarkable amount of consistency from state to state.

These state laws solve many common partnership problems in a sensible way. For example, the UPA says that if you don’t have an agreement, each partner shares equally in the profits and has an equal voice in managing the business.

Although it’s possible that your state law provides exactly what you and your partners want, it’s usually better to create your own agreement. And you’ll probably want to modify at least some of the terms. For example, if one partner contributes more assets than the others, you may want to give that partner a greater share of the profits. Or you may want to allow one or more partners to receive a salary for their services. You may want to include customized provisions on how to value a partner’s interest in the business if a partner dies or leaves. In that situation, many partners want to assign some value to the goodwill of the business for tax purposes—something that does not happen automatically under the UPA. With a written partnership agreement, you can tailor your partnership to fit your needs.

There are other benefits to working out the details in a partnership agreement. It will get you to focus on issues you might not have thought through with your partners—issues that you and your partners may not agree on. For example, what if one partner wants compensation beyond a share of the profits to recognize work he or she performs in the evening or on weekends for the partnership? By getting issues out into the open early, you can nip potential problems in the bud.

If you are thinking about starting a new business with partners and have questions about partnership agreements, give us a call at 253.858.5434 to set up an appointment. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

An Outline of the Probate Process

Probate is the court-supervised process of gathering a deceased person's assets and distributing them to creditors and heirs. Every State has its own rules about the documents it requires, what they must contain, and when they must be filed. Bearing in mind that no estate is perfectly typical, here is an outline of the probate process:

GETTING STARTED.
You begin the probate process by asking the Court to officially make you Personal Representative (PR) (formerly called an Executor or Administrator) If you end up acting as PR, you'll need to:
* File a request (called a Petition or Application) for probate You will also need to file the original Will (if there is one) with the Court.
* Publish a notice of the probate in a local newspaper according to court rules. Mail notices to creditors you know about.
* Mail the notice to beneficiaries and heirs, as required by the court.
* File proof that you properly published and mailed the notice.
* Post a bond (if required by the court), which protects the estate from any losses you cause (up to a certain dollar amount). The amount of the bond depends on the size of the estate.
* Prove the Will's validity by providing statements from one or more witnesses to the will. This is often done by submitting the "self-proving affidavit" that was signed by the witness in front of a notary at the time the will was signed.

ADMINISTERING THE ESTATE.
As PR, you're in charge of keeping estate property safe during the probate process. You will prepare a list of the Decedent's assets and, if necessary, get assets appraised. You'll need to:
* Get an employer identification number for the estate from the IRS.
* Notify the state health department of the death.
* Open an estate bank account.
* Arrange for preparation of income tax returns.
* Prepare an inventory and appraisal of estate assets.
* Mail a notice to creditors and pay debts.
* If required, file a federal estate tax return within 9 months after death. (Most estates are not large enough to owe federal estate tax).
* If required, file a state inheritance tax return, usually within 9 months after death. (Fewer than half the states impose their own tax.)

CLOSING THE ESTATE.
When the creditor's claim period has passed, you've paid debts and filed all necessary tax returns, and any disputes have been settled, you're ready to distribute all remaining property to the beneficiaries.

If you have questions about administering a Decedent's estate, give us a call at 253.858.5434 to set up an appointment. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

The Importance of Regularly Updating Your Estate Plan

It's important to review and update your estate plan every few years. Sometimes the law changes - in recent years, there have been changes to the estate tax exemption, the law recognizes new kinds of trusts and deeds, and the adoption of the Trust & Estate Dispute Resolution Act (TEDRA) has greatly changed how Wills and Trusts can operate and how disputes are resolved. Sometimes the world in general changes - recognition of same-sex marriages changed how families are defined,... fertility science has changed how "descendants" and "heirs" are defined, and the internet and computer technology have changed how "assets" are defined.

If it's been a while since you've last reviewed or updated your Will, Trust, Power of Attorney, or other estate planning documents, give us a call at 253.858.5434 to see how we can help. We proudly represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Drafting Contracts for Small Businesses

Contracts. Contracts define most business relationships. If you're a small business owner, we can help you by negotiating and drafting legally-enforceable contracts--like service or performance or sales contracts, independent contractor agreements, and non-compete or nondisclosure agreements. We can also assist with contract disputes such as breach of contract matters.

Give us a call at 253.858.5434 to set up an appointment. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

So you won in court and got a judgment against the other party. Now what?

When you win a case in court, the jury or judge may award you money damages. In some situations the losing party against whom there is a judgment (the "Judgment Debtor") either refuses to follow the court order or cannot afford to pay the full amount of the judgment. If this happens, you may have to take additional steps and incur further expenses to collect the judgment. Here are some things to keep in mind when collecting money after a judgment:

1. Individuals and businesses that are financially stable usually pay judgments that are entered against them. They do so because they want to avoid unpleasant collection activities and further costs.

2. If a Judgment Debtor refuses to pay a judgment or is insolvent (meaning their debts are greater than their assets), you may find it quite difficult to collect a judgment.

3. In most states, you can conduct post-judgment supplemental proceedings (interrogatories, requests for production of documents, depositions, etc.) to uncover a Judgment Debtor's sources of income and assets.

4. When you hold a judgment against an individual, you can garnish their wages to collect your judgment. Many states limit the amount you can garnish from a debtor's wages to 25% of the Judgment Debtor's paycheck.

5. Similarly, you may also garnish the bank account of a Judgment Debtor.

6. If you hold a judgment against a company, you may be able to get the sheriff to seize the money in the company's cash register. Judgment Debtors may also have vehicles, machinery, equipment, or other assets that are available to seize.

7. The time period for collecting judgments in many states is ten years, but after that expires you can usually renew the judgment for another ten years. So, even if the Judgment Debtor does not have any income or assets today, income or assets may be accessible in the future.

8. If the Judgment Debtor files a Chapter 7 bankruptcy, your ability to collect is cut-off, like most other creditors.

9. You should hire a lawyer to assist you with your collection efforts. You can typically hire a collection lawyer on an hourly basis or pay the attorney a percentage of the amount collected.

10. To collect a judgment against a Judgment Debtor or their property located in another state, you will need to record your judgment as a foreign judgment in that state. A court cannot enforce a foreign judgment unless the Judgment Debtor has “sufficient contact” with the state. Usually, you will want to file the foreign judgment in the county where the debtor lives or where the property is located.

For help understanding your rights and starting collection procedures for your judgment, give us a call at 253.858.5434 to see how we can help.

The Job of the Personal Representative of an Estate

If you're the executor of someone's estate, it will fall to you to distribute their assets and wrap up their affairs. Depending on the size of the estate, this can be a lengthy process that can take anywhere from 6 to 24 months and involves a lot of work. But think of it as an indication of the person's trust in you--they knew you would handle their estate the way they desired.

The process doesn't have to start immediately following a death. Give yourself time to grieve and be with family. You don't need to run from the funeral home to the lawyer's office. This is an extremely emotional time. Usually, people are overwhelmed when they walk into our office. Hopefully, they'll be less overwhelmed when they leave.

If possible, you'll want to see a lawyer within a month of the death. Ideally, this will be the same lawyer who drafted the Will. The sooner you get started, the sooner it's over. And we have found that some people like having tasks to do--it helps them cope with their loss.

The first thing to do is get a copy of the decedent's estate planning documents, including the Will and Trust Agreement, if one exists. Often, the lawyer will have one. At your initial meeting with the lawyer, we'll explain your role as Personal Representative of the estate and will guide you through this process.

Your first homework assignment will likely include getting copies of the decedent's death certificate and a statement of assets and liabilities. This should include a listing of all assets, bank accounts, life insurance policies, annuities, and investments, as well as a list of all outstanding debts. You'll want to start collecting the monthly statements on the bank accounts, so you can estimate their value on the date of death.

If the decedent's assets will be distributed outright to heirs, the matter is a relatively simple one. However, if the Will calls for the creation of trusts (to hold assets for future generations, or control the distribution to beneficiaries), those trusts will need to be funded, which means changing the titles on assets. Those trusts will then need to be administered and invested appropriately by the Trustee.

If the value of the decedent's estate amounts to more than $5.48 million, the estate will need to file a federal estate tax return. This should be drafted by a professional with experience in the area. The tax return and estimated taxes need to be filed within nine months of the death. Even if you file for an extension to file the return, the estimated tax still needs to be paid within the nine-month deadline. While you can obtain an extension to pay the taxes due, the IRS will begin charging interest on any unpaid amounts beginning at the nine-month deadline.

In the next few months, you and your lawyer will tally the decedent's debts and liabilities, determine which are legitimate, and pay those accordingly.

During this time, your lawyer will also weigh any challenges to the Will; for example, if an heir disputes how the assets have been allocated. We recommend that you settle any such disputes out of court rather than resorting to litigation, which is time-consuming and emotionally taxing and can eat up the disputed assets.

If you have been named as Executor or Personal Representative of the estate of someone who has recently died and have questions about administering and distributing the estate, give us a call at 253.858.5434 to see how we can help.

Estate Planning Presentations

We gave a presentation last week to the Spinnaker Ridge Community Club here in Gig Harbor about basic estate planning and probate. If your organization, club, church group, etc., would like a witty and charming speaker to come talk about Wills and Trusts, give us a call at 253.858.5434 and we can set something up.

Representing Small Businesses and Their Owners

If you're a small business owner, it's a good idea to have a lawyer advising your during the life of your business. We have over 20 years' experience helping small businesses and their owners with things like business formation, governance, buy-sell agreements, contracts, leases, and any related litigation. If you own a business or are thinking about starting one, give us a call at 253.858.5434 to find out 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.