Two Major Misconceptions About Probate

Probate is the legal process of settling an estate once someone dies - paying their creditors and transferring their remaining assets to their heirs and beneficiaries. In Washington and Idaho, probate is a well-defined and orderly process prescribed by law.

When someone dies and leaves a valid Will, it is admitted to probate by the Court and a Personal Representative ("PR") is appointed to settle the estate and distribute the assets as stated in the Will. If someone dies without a Will, the Court applies the laws of intestacy to determine how their property will be divided. Intestacy laws may limit inheritance by a spouse when the decedent had assets they maintained as separate property; those owned prior to marriage, inherited or received as a gift during marriage, or if the decedent had children by another relationship.

If you've heard of probate, what you may have heard was probably not very positive. However, in some instances, avoiding probate may not be the right plan for your estate. Yet, some 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.

There are numerous misconceptions about probate, so you need to know how to separate fact from fiction.

Misconception 1: Probate should be feared and avoided. It is true that, in some states, probate can be an onerous and expensive process. Fortunately, Washington and Idaho are not among those states. Probate in Washington and Idaho is much easier than it is in other states, and often the appropriate process for administering an 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.

Complicated estates with considerable assets are typically 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 the Will or if the court allows, the PR 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 state 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 or be forever barred to four months from probate filing. A typical probate in should last six to nine months.

If you have questions about probate in Washington or Idaho, give us a call at 253.858.5434 to see how we can be of service.

Estate Planning for Artists, Authors, Songwriters, and Musicians

Estate planning for artists, authors, songwriters, and musicians is a little different than planning for us non-artist folks, primarily because of copyrights and publishing rights. I often advise artist clients to appoint an "Artistic Advisor" in their Wills or trust instruments. This is particularly useful for artist clients who don't have other individuals available to make informed decisions regarding their body of work. The Artistic Advisor can be an agent, manager, publicist, curator, educator, or other professional or expert in the particular area of art. Designating an Artistic Advisor can help artists and their families gain a level of comfort with their estate plans that otherwise may not be achieved.
If we can be of service to you, your family, friends, co-workers, or neighbors, give us a call at 253.858.5434. We are proud to serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Wills Signed in Hospitals and "Deathbed" Wills

In Washington and Idaho, Wills are valid even if they're signed and witnessed in a hospital or even on a deathbed. However, although a Will is not invalid merely because it was signed in a hospital, it is not a good idea to sign your Will in a hospital or to wait until you’re on your deathbed.

Why? First, we can’t predict when we’ll be hospitalized or under what circumstances. You may go to the hospital unconscious and be physically unable to sign a Will. So, it is not wise to put off getting your Will made. Second, just because a Will signed in a hospital is valid, the Will may face additional scrutiny when it is filed with the probate court after the Will-signer’s death. That is, family members may be more likely to challenge the Will, fearing for example:
* that the Will was signed under duress;
* that the Will-signer was too sick to understand the document being signed;
* that the Will-signer was under the influence of medication; or
* that the Will-signer was mentally incapacitated.

These are all valid arguments. For a Will to be valid in both Washington and Idaho, the Will-signer must understand what they're signing, the nature and extent of their property, their nearest family members, and so forth. So, while it doesn’t directly matter that the Will was signed and witnessed in a hospital, indirectly it matters a great deal.

There was a recent case in Texas involving a Will signed on the signer’s deathbed in a hospital. Again, the Will was not directly invalid because it was signed in a hospital. However, in this case, indirectly it mattered a great deal. The jury in this case determined that the Will-signer did not have the correct state of mind legally to sign a valid Texas Will. The jury considered, for instance, that the Will he signed stated that he was not married, when he actually was married. The jury reasoned, how could the Will-signer have the right state of mind for signing a Will if he didn’t even know he was married?

What can you do to make sure that your Will doesn't get challenged? Don’t wait to sign a Will until you’re in the hospital. It is more likely that someone will challenge the Will if it is signed in a hospital. And, if the Will gets contested, it’s more likely that people will question whether or not you had the legally required state of mind to sign the Will.

We have assisted clients with our fair share of Wills signed in hospitals, after we've considered whether the client has the required mental ability to sign the Will. If the client has the legally required “testamentary capacity,” then we will agree to conduct the Will signing in a hospital. If this is done, we make sure to document from the witnesses that the client understand the contents of the Will, that the client understood the effect of signing the Will, and that the client otherwise possessed testamentary capacity.

If you have questions about preparing and signing Wills in Washington or Idaho, give us a call at 253.858.5434 to see how we can help.

Representing people injured in auto collisions.

If you, a family member, friend, neighbor, or co-worker has recently been injured in an auto collision, we can help. We'll deal with the insurance company for you, we'll gather your medical records, and negotiate a fair settlement for your injuries. If we can't work it out informally with the insurance company, we'll file a lawsuit on your behalf and bring your case to a jury. Give us a call at 253.858.5434 for a free initial consultation.

The Importance of Having a Board of Directors for Small Businesses

If your small business is structured in certain ways, having a board of directors is required. Maintaining a board of directors and holding meetings may seem like unnecessary formalities, but they’re important to observe to maintain your liability protection.

C corporations and S corporations must elect a board of directors. Exact rules and regulations for boards vary by state. All states require that corporations form a board of directors elected by shareholders, hold at lea...st one annual meeting, and maintain meeting minutes that document topics discussed and actions taken. LLCs are not required to have a board of directors, but can choose to elect one if they choose.

Observing corporate rules is an important part of maintaining limited liability for your shareholders. If the company is sued and you don’t have evidence that you’ve followed the required corporate formalities, the court can “pierce the corporate veil” and hold owners personally liable for company debts. Neglecting to elect directors, hold board meetings, or prepare meeting minutes are all viable reasons for a court to pierce the veil.

The board of directors, elected by shareholders, is responsible for overseeing the company and setting corporate policy. Directors authorize stock issuance, declare dividends, and set executive salaries. They also make significant financial decisions around big ticket items like business loans and real estate purchases. The day-to-day operational decisions are taken care of by the officers, whom the directors appoint.

In lieu of board meetings, Washington and Idaho allow directors to sign a consent resolution for important matters. Some states require directors to meet in person but most allow directors to hold meetings over the phone.

At a small company, corporate directors and officers are often the same people. The company CEO is often also the chairman of the board and other top executives, such as the CFO and COO, may also serve. If you have a major shareholder who isn’t an employee—for example, an angel investor—that person may insist on being a board member or sending a representative to sit on the board.

If you're a small business owner and have questions about the role of a Board of Directors, 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.

Business Succession Planning to Keep Your Family Business in the Family

If you're a small business owner, you may wish to keep the business in your family or sell it, before or after you die. Regardless of which option you choose, careful planning will ensure the business can stay up and running and be protected.

If your business has one or more co-owners, you might consider establishing a buy-sell agreement that says that upon the death of any owner, their interest is automatically purchased by the other owner(s). This arrangement can ensure that beneficiaries of the deceased owner (including spouses or other family members) don’t unintentionally become owners. Life insurance can be used or an irrevocable life insurance trust (ILIT) can be set up to cover these buy-sell agreements and provide necessary liquidity.

At a minimum, a business succession plan should address the transfer of the management and ownership of a business. Management succession planning may include:
* Development, training, and support of successors.
* Delegation of responsibility and authority to successors.
* Outside directors/advisors to bring objectivity to the process (when necessary).
* Maximizing retention of key employees through equitable compensation planning for management, family/non-family employees, and active/inactive shareholders.

Ownership transfer planning considerations may include:
* Coordination between who will own the business and who will manage the business.
* Consideration of the best interests of the business and the owner’s family.
* Timing of a transfer of the business during your lifetime. This may provide you with the opportunity to consult with the successor, and generally reduces the risk of a discounted sale of the business.

We use estate planning tools like ILITs, grantor retained annuity trusts (GRATs), and grantor retained unitrusts (GRUTs) to achieve liquidity, income, and tax planning goals for clients in their business succession plans. Another approach is the family limited partnership or a family limited liability company (FLP or FLLC). For example, you can form an LLC to hold the business assets. Some of the LLC units can be transferred to your family members, potentially eliminating the units from your taxable estate. Because LLC interests do not carry control of the business, the value of the transferred assets may be discounted for gift tax purposes. As with GRATs and GRUTs, FLPs and FLLCs are subject to complex rules and you should consult with experienced tax and estate planning professionals.

If you have questions about keeping your small business in the family as part of your estate plan, 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.

Using the Trust and Estate Dispute Resolution Act (TEDRA) to Resolve Estate Disputes Over Asset Distribution

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

If you have a dispute regarding a trust or estate that you’re unable to resolve, you could file a TEDRA petition in Superior Court 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 construction and interpretation of Wills and Trusts;
* The competency of a decedent at the time of signing a Will;
* 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 trusts and estates 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.

If you are involved in a dispute over a trust or an estate, give us a call at 253.858.5434 to see how we can help.

Boise, Idaho Meetings, May 25-28, 2017

Idaho clients, colleagues, family, and friends - I'm going to be in Boise May 25-28 and have time to meet with clients or potential new clients on Friday the 26th. Give me a call or drop me an email if you want to set something up.

We represent people suffering neck and back injuries in auto collisions.

Injuries to the back and neck are some of the most commonly caused traumatic injuries. We routinely represent people who have suffered injuries to their cervical (neck), thoracic (mid-back) or lumbar (low-back) spine in auto, bicycle, and motorcycle collisions.

If you or a loved one sustained a back or neck injury in a collision caused by someone else, our law firm is committed to helping you get the most favorable results. Because many back and neck injuries are unique to the individual, many insurance companies and defense lawyers unfairly evaluate these cases and may only offer a person with these type of injuries a fraction of the case's real value.

Give us a call at 253.858.5434 and allow us to give you an honest assessment of your case. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Hiring a Lawyer When Starting a New Business or Nonprofit Organization

Insightful founders of new businesses or nonprofit organizations understand the value of involving a lawyer in the early stages of planning. A lawyer can help identify issues, opportunities, and threats which allows founders to appropriately plan their organizational and operational structures. As a result, investing in legal assistance at the outset can help avoid costly reactionary steps in later stages that might otherwise be necessary if the founders had unknowingly or unintentionally built their plans on a problematic foundation.

If you are starting up a new business or nonprofit organization, 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.

Mediation as an Alternative to Protracted, Expensive Estate Litigation

Other than an ugly divorce, a Will contest or other estate dispute can do more damage to family relationships that any other single event. The worst legal, emotional, and often financial nightmares begin when someone in a family contests a Will--that is, they seek the court's intervention to modify or set aside a loved one's Will or Trust. What they do not see going on is the emotional chaos that invariably results if litigation is pursued. Estate disputes can last for years. Who wins in these cases? Usually, no one but the lawyers.

Is there a better alternative? While a lawsuit over a loved one's estate may be unavoidable, there are often better ways to resolve the dispute than turning the matter into litigation. Mediation is one such alternative. It is an opportunity to get the parties together before taking the matter to court, thereby saving money, time, and emotional scars that may never heal.

There are some warning signs that can help you identify whether an estate is going to be difficult to administer:

(1) SECOND MARRIAGE SITUATIONS. These often lead to litigation when there are children from prior marriages, particularly where bad or no estate planning may result in everything being left to the surviving spouse. Regardless of whether or not the new marriage lasted longer than the marriage that produced the children, the children often lose. The surviving stepparent can easily disinherit the deceased's children once they have control of the estate.

(2) IF A CHILD HAS BEEN DISINHERITED. In a lot of states, there is little protection for disinherited children. If properly drafted, a Will can easily disinherit a child. Regardless, when someone has been intentionally disinherited, he or she will often contest the Will.

(3) WHEN ONE CHILD IS FAVORED OVER ANOTHER IN A WILL. Disparate treatment of children is a situation where the act, in and of itself, is not grounds for a successful Will contest, but the emotions involved often lead to litigation. All too often feelings of sibling rivalry do not go away in adulthood.

(4) WHEN A NEIGHBOR, FRIEND, OR DISTANT RELATIVE STARTS INFLUENCING AN ELDERLY PARENT. Sometimes the motives are not those of a good Samaritan, but are more about abject greed. If an estate plan has recently been altered to favor someone other than the "natural objects of the parents' bounty," an estate dispute is likely to follow.

(5) IF THE PERSONAL REPRESENTATIVE IS DRAGGING HIS OR HER FEET. Years ago, we were involved in one probate where the estate was left open with assets undistributed to beneficiaries for 11 years. Where substantial delays occur, heirs get impatient and suspicious. Court intervention may be their first step in bringing closure and resolution.

If any of these situations seem familiar, then you or someone you know is probably gearing up for a lengthy, protracted Will contest. Before taking those next steps, however, talk to a lawyer who not is not only experienced in estate litigation, but also who has experience using alternative dispute resolution techniques. Find out what their track record is in settling estate disputes before protracted litigation has consumed the entire estate. We regularly have clients who came to us looking for legal recourse only to learn that they are facing legal proceedings that could take years to resolve if the family members they intend to litigate against become stubborn or the fires of their dispute are fueled by litigious counsel. Realizing they either may not have the resources to follow through with a process that will only wreak havoc on relationships that are already strained or do not have the inclination for a lengthy, emotional battle, they agree to mediation.

It is not easy to sit in a room with someone with whom there is emotional conflict, but what most people do not realize is that the alternative course--protracted litigation--is more painful. A good lawyer can help all parties through the process and find ways to settle the estate before it is gone. After all, most people do not really want to leave their legacy to the lawyers.

If you, a friend, family member, neighbor, or coworker are involved in an estate dispute and have questions about how we can be of service, 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.

Semi-Annual Estate Plan Reviews

Guess what we spent the day doing last Friday? At the end of April and October every year, 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 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 things 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.

Power of Attorney for Minor Children's Care

If you've got children, what happens if you become incapacitated? Washington law allows you to create a power of attorney for minor children's care, appointing someone (your "agent") to make decisions for your child if you and the child's other parent are incapacitated or otherwise unavailable to make decisions. A few of the more common powers your agent could have include:

* Enrolling child(ren) in school and extracurricular activities;
* Having access to school records and participating in decisions regarding the child(ren)'s education, including attending parent-teacher conferences;
* Obtaining medical, dental, and mental health treatment and making healthcare decisions on behalf of child(ren);
* Providing for the child(ren)'s food, lodging, housing, recreation, and travel.

You may choose any adult to be your agent. Your agent does not have to be a family member. When choosing an agent, consider the following:

* Someone you trust;
* Someone your child(ren) know;
* Make sure agent has ability to act on behalf of your child(ren)'s best interests by considering the potential agent's other time commitments, experience with child(ren) and their general health.

If you have questions about powers of attorney for minor children's care, give us a call at 253.858.5434 to make an appointment.

Patience, patience, patience. Why do some personal injury claims take a long time to settle?

What if you have a personal injury case, and you don’t want it to drag on for years? As a general rule, you can settle any personal injury case quickly as long as you are willing to take less money. The first thing to know is why some personal injury cases can take a long time to settle. There are three main reasons why a personal injury case can move slowly: (1) there are legal or factual problems with the case; (2) the case involves a lot of money; or (3) you have not reached maximum medical improvement from your injuries. If your case involves any of these situations, the bad news is that your case is simply going to take some time to settle unless you are prepared to take pennies on the dollar in order to resolve it.

(1) There Are Problems With The Case. The value of a personal injury case is determined by liability (who was at fault) and damages (how badly was the plaintiff injured).

If liability is hard to prove, then the insurance company is not likely to make a reasonable settlement offer until the claimant has filed a lawsuit and hired liability experts to show that the defendant was at fault. If there are legal issues in the case (i.e., the insurer believes that you have no legal right to sue), then it is unlikely that the insurance company will make any significant offer at all on the case until a judge has ruled on your right to sue.

Alternatively, there may be problems with damages. For example, the treating physicians may be unsure that it was the defendant’s negligence that caused the plaintiff’s injury. It is always your burden to prove that the defendant’s negligence caused your injuries. If your doctors are unsure on this, then the insurance company is not going to make a reasonable settlement offer until it is satisfied that you can produce a doctor to testify that the defendant’s fault caused your injuries.

(2) The Case Involves "Big Money." Another factor that can delay settlement is if the case involves large damages. Insurance companies simply will not pay big money on a settlement until they have done their due diligence. For an insurance company, due diligence means investigating every aspect of the case. The insurance company will not be prepared to settle for reasonable money until they are convinced that they either don’t have a good defense to the case, that your injuries are as severe as you claim that they are, and they cannot attack your credibility.

Further, sometimes insurance companies will delay settlement on a big case simply to see if the plaintiff will give up and accept less money. Most badly injured people need the settlement money, and cannot wait too long for compensation. Insurance companies know this and will try to wait out the plaintiff.

(3) You Have Not Reached Maximum Medical Improvement. Another legitimate reason why settlement might take a long time is that you are still treating for your injuries. If you can afford to wait, you never want to settle a personal injury case until you have reached maximum medical improvement (MMI) from your injuries. MMI means that you are as good as you are going to get. The reason that you want to wait until you are at MMI before settling is so that your lawyer will know how to value your damages. If you are still treating, it is unclear whether you will fully recover or not. If you fully recover from your injuries, your case is likely to be worth less than if you never did recover.

If you have been injured because of someone else's negligence, give us a call at 253.858.5434 to set up an appointment for a free initial consultation.

Questions to Ask Your Lawyer When You Start a New Business

Small business owners have their hands full making plans, developing products and services, and lining up financing. But meeting with a lawyer before starting a business can be one of the smartest moves you can make. Your lawyer can explain how to start a business and answer your legal questions. But more importantly, a lawyer can identify the risks you face and help you minimize them.

When you meet with your lawyer for the first time, it’s a good idea to have some questions in mind. But as a new business owner, you may not even know where to start. Here are some things to ask.

1. WHAT BUSINESS STRUCTURE SHOULD I CHOOSE? Before starting a small business, you must decide how your business will be structured. If you do not form a formal business entity, your business will either be a sole proprietorship (with one owner) or a partnership (with more than one owner). Legally, you and your business will be the same “person,” so if your business has debts or is sued, you are personally liable for those obligations. To limit this liability, you can form a business entity such as a corporation, limited liability company, or limited liability partnership. Owners of these business entities do not risk all their personal assets if the business cannot meet its financial obligations. Their losses are limited to the amount they have invested in the company. It’s important to weigh your options and choose carefully because your choice will affect the way your business is owned, managed and taxed.

2. WHAT DO I NEED TO KNOW ABOUT CHOOSING A NAME FOR MY BUSINESS? You probably already have ideas about the name you’d like for your new business. But you need to consider legal issues before you start ordering signs and business cards. Every state has rules about the names that new business entities can use, and in general, you can’t choose a name that another business is already using. In addition, it’s risky to choose a name that might infringe on another business’s registered trademark. And if you think you’ll want to trademark a business name, you’ll want to choose a name that meets the criteria for trademark protection.

3. HOW DO I MINIMIZE MY RISKS AS AN EMPLOYER? A variety of employment laws may apply to your business, and you risk fines, penalties and/or employment-related litigation if you don’t know the laws you must follow and the steps you need to take to stay in compliance. Laws range from anti-discrimination laws to health and safety regulations to wage and hour laws. You may need policies and procedures, handbooks, and training to ensure that you don’t inadvertently violate them. You must also comply with laws relating to such things as the minimum wage. And if you employ people who are not U.S. citizens, you may face immigration issues.

4. WHAT SHOULD BE IN MY OPERATING AGREEMENT OR BYLAWS? Bylaws and LLC operating agreements provide important guidelines for operating your business. These documents explain such things as how decisions will be made, when and how shareholder meetings are held, how to handle LLC ownership changes, and how shares of stock are issued.

5. HOW CAN I PROTECT MY INTELLECTUAL PROPERTY? All businesses potentially have trademarks that they use to identify the business and distinguish it from others. Your business name, logo, labels, slogans and packaging can all be trademarks, but you must take steps to protect them. You may decide to register a trademark with the U.S. Patent and Trademark Office. Businesses also may have copyrights in any original works of authorship, including such things as photographs, brochures, and websites. Copyright protection is particularly important if you are in a creative field, and if you have an invention, you may need to apply for a patent.

6. WHAT CONTRACTS DOES MY BUSINESS NEED? Contracts protect your business by describing the rights and responsibilities of the parties to the agreement. A well-written contract can reduce the number of disputes that arise, ensure that you get paid for the work you do, and provide a clear remedy if one party doesn’t hold up its end of the deal. Your business might need contracts for routine transactions, to protect confidential information, to describe employment relationships, or for leases and other major transactions.

7. WHAT OTHER RISKS SHOULD I BE GUARDING AGAINST? Every business faces a unique set of risks. While some can be minimized with contracts, entity formation, and other proactive steps, others require insurance. Always ask your lawyer to assess your risks and identify ways to alleviate them.

Getting business advice and legal help from a lawyer is a smart way to start a business off on the right foot. But don’t lose touch with your lawyer once your business is up and running. Make it a habit to seek business legal advice on a regular basis to ensure that you are protecting yourself as your business grows and changes. If you're a small business owner and need legal help, give us a call at 253.858.5434.