Wills vs. Trusts

There is a lot of confusion over whether you need a Will versus a Trust. Normally, the Trusts we are discussing are Revocable Living Trusts - Trusts that can be amended and/or revoked during your lifetime.

Wills work fine for most people. Probate in Washington is not difficult. It's not like California where the fees are based on estate size. Wills work perfectly well and are not necessarily to be avoided solely "to avoid probate."

Trusts work well if there is property is multiple states so you are not probating in several jurisdictions. There is more privacy with a Trust than probating a Will as the Trust documents generally do not become public records like filing the Wills and probate documents at the courthouse. Trusts do not have to be probated - but if you forget to put something into your Trust it might end up in your estate and still subject to probate.

The vast majority of estates (Wills or Trusts) have no estate tax issues - the 2019 federal estate tax exemption amount is now $11,400,000 which, with proper planning, for a married couple could double to $22,800,000. Washington excludes the first $2,193,000 from tax. Washington then has a graduated tax from 10-20% that increases over the first $9 million of the taxable estate.

Trusts do not stop fighting heirs and court battles as Washington has the "Trust and Estate Dispute Resolution Act" (TEDRA) which allows such estate battles to be brought to court.

The point is, each situation is unique. Give us a call at 253.858.5434 to help sort out what is best for you and your family.

Staying off social media while your personal injury case is in process.

For our clients who have been injured in car crashes, we always advise them to shut down their Facebook and Twitter accounts during the claims process. But let’s be honest, this is easier said than done. At the very least, during a personal injury claim, be careful about what you post to social media and remember, nothing is private.

PRIVATE PROFILES AREN'T PRIVATE. When we ask a client to shut down their Facebook or Twitter page, the first response we get is a bargain: “What if I set my profile to private?” Guess what? Just because your profile is private doesn’t mean that it can’t be accessed in the event of a lawsuit. In fact, your ENTIRE Facebook page can be subpoenaed during the discovery process. This includes private messages, chats, pictures, status updates, and even your Facebook games.

WHAT WILL THE DEFENSE DO WITH MY FACEBOOK INFORMATION? The second option clients suggest when we ask them to shut down their page is not posting about the accident at all. “I won’t post any injury pictures,” “I’ll have friends call me about it instead,” etc. While the defense would likely use posts about the collision against you, that’s not all they’re looking for. Defense attorneys are looking at your behavior after the collision. For example, posting pictures of yourself on vacation, dancing, or playing sports following an accident just sets up the insurance company to say, “does this look like someone who’s injured to you?”

And whatever you do, don't post pictures of the collision or the vehicle damage and never - NEVER - post something like, "I was in an accident last night, but don't worry, I'm OK!"

GETTING TAGGED IN PICTURES. Remember, you’re not the only one who can post on your Facebook wall. A colleague of ours recently had a case with a client who was injured in an auto collision but who posted a status about going to the gym with a few friends. The post was dated shortly after her collision. This wasn’t a case of ours, so we don’t know if the woman was exaggerating her injuries, or if she thought “walking it off” would do her some good. The bottom line was that she posted about doing a very physical activity right after her accident. While you might say to yourself that you’d never post vacation photos or gym statuses after a crash, what if these people didn’t bring it upon themselves? We’re all familiar with the “tag” tool on Facebook. Most of the time we laugh off how unflattering Facebook tags can be compared to your own pictures, but in personal injury cases, they can cost you real money. And if the defense catches sight of that photo of you on a treadmill before you can “untag” yourself, they would be more than happy to use it against you.

CAN THE DEFENSE SUBPOENA YOUR SOCIAL MEDIA? In this day in age, it seems pretty unfair that attorneys can subpoena your information, but yes, yes they can. It sucks, but it’s perfectly legal. Mediums of communication change from generation to generation. Our great-grandparents sent letters to one another, our parents spoke on the telephone, our generation communicates on Facebook.

The laws haven’t caught up to this new mode of communication yet, and unfortunately, judges are tending to side with the defense attorneys. When they ask for your social media information, they get it all – even your private chat conversations.

WHAT TO SAY ON SOCIAL MEDIA AFTER A CRASH. Let us reiterate: If you’ve been injured in an auto collision, DELETE YOUR SOCIAL MEDIA ACCOUNTS.

If you have to say something to your friends to let them know that you’re unplugging for a bit, just make a status update or tweet with the basics; “Hey guys, I was in a car accident recently. I’m going to turn my social media accounts off for a while. You know my phone number if you need to contact me.” Then follow through. Delete the account. Don’t avoid posting, don’t make your account private, delete it. It’ll be there in a few months when your case is settled.

If you have questions about personal injury cases or what else to do or not do after a collision, give us a call at 253.858.5434.

Do you need help writing or enforcing a contract? You've come to the right place.

Do you need help writing or enforcing a contract? You've come to the right place. Whether you are a small business, a large company, or an individual, we can help. We draft, negotiate, and execute agreements in any number of settings -- like business contracts and independent contractor agreements. We also assist with contract disputes such as breach of contract claims.

If you have a questions or an issue regarding a contract, either one you're a party to or one you're about to be, give us a call at 253.858.5434 to set up an appointment today. We represent clients throughout Washington and Idaho and are available to meet in person, by phone or via Skype or FaceTime.

Interesting recent decision from the Washington State Supreme Court regarding employer liability for employees' sexual harassment, Floeting v. Group Health, 434 P.3d 39 (Wash. 2019).

Earlier this year, the Washington State Supreme Court handed down its decision in Floeting v. Group Health Coop., 434 P.3d 39 (Wash. 2019), ruling that places of public accommodation are strictly liable for illegal discrimination by their employees (including for claims of sexual harassment). Points from the decision include:

• Under the plain language of the Washington Law Against Discrimination (WLAD), employers are directly liable for the sexual harassment of members of the public by their employees (just as they would be if their employees turned customers away because of their race, religion, or sexual orientation).

• An employer will be strictly liable if its employee caused the harm prohibited by the statute–from the first such event–even if it did not participate in the discrimination and was not negligent in training or supervising its employees.

• There is no statutorily required pervasiveness or severity requirement for discriminatory conduct in the public accommodations context. A single discriminatory act in a place of public accommodation may violate the WLAD. (However, the conduct must be “objectively discriminatory” under the “reasonable person” standard.)

• The Court reasoned: “If employers know that the only way they can prevent lawsuits is by preventing their employees from discriminating at all, they will try even harder to make sure that their employees are well trained, are well supervised, and do not discriminate.”

The scope of "any place of public resort, accommodation, assemblage, or amusement" (defined at RCW 49.60.040(2)) includes: grocery stores, retail stores, gas stations, hotels, motels, restaurants, bars, banks, theaters, concert halls, sports arenas, museums, auditoriums, convention halls, taxis, private bus lines, barber shops and beauty salons, doctor and dentist offices, fitness centers, and nonprofit organizations, such as food banks, shelters and senior centers.

Feel free to share your thoughts on this decision.

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PLEASE NOTE: The Law Offices of P. Stephen Aita accepts payment by Visa, MasterCard, American Express, and Discover.

PLEASE NOTE: The Law Offices of P. Stephen Aita accepts payment by Visa, MasterCard, American Express, and Discover.

The legal and financial complexities involved in probate and trust administration can be challenging. We can help guide you through the process.

Losing a friend or family member can be a difficult and emotional time. The legal and financial complexities involved in probate and trust administration can be challenging. We can help guide you through the process, taking on as much or as little of the work as needed, to ensure that the estate is settled correctly, always with sensitivity to the people involved and a view to avoid disagreements before they arise. With a lawyer handling the complexity of estate administration, our clients have more time to focus on grieving and supporting family members.

Another side of our practice is working with trustees of established trusts to ensure compliance with the trust agreement and the law. Trustees are required to provide certain notice and information to beneficiaries when a trust is established as well as throughout the term of the trust. The trust agreement usually provides for additional requirements, including terms for distributions. A trustee has a fiduciary duty of the utmost good faith and loyalty to beneficiaries, and it is critical that the trustee is well informed and perform his or her role diligently.

In addition to representing personal representatives and trustees, we also represent heirs and beneficiaries of estates and trusts, who feel they are not being treated fairly by a personal representative or trustee.

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

Part of every estate planning conversation with your lawyer should include a discussion of life insurance.

Many people own life insurance policies that are no longer needed to protect against estate taxes. Part of every estate planning discussion with your lawyer should include a review of life insurance needs and the extent to which the needs are met by existing policies. Some people may discover they own policies that are no longer required for family security. A gift to charity of a policy that is no longer needed may offer income tax savings. Life insurance proceeds also can be divided between charitable and family beneficiaries, and can fund a charitable remainder trust or charitable gift annuity.

If you have questions about how life insurance fits into your overall estate plan, give us a call at 253.858.5434 to set up an appointment today. We proudly represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Interesting recent decision regarding amending trusts from the Washington State Court of Appeals, In re Estate of Meeks, No. 35270-6-III.

Interesting recent decision regarding amending trusts from the Washington State Court of Appeals:

At Lloyd Meeks's death in 2002, a bypass trust was to be funded, with the remaining assets passing to a marital trust for his wife, Mabel. At her death, assets remaining in either trust were to pass 80% to the couple's only child, Mary, with the remainder to be divided among several charities. The trust could not be amended after Lloyd's death, but Mabel was given a limited power of appointment over the bypass trust.

Because the trust at Lloyd's death was less than the amount excluded from estate tax, all assets were to be placed in the bypass trust. Mabel didn't retitle the assets in the trust's name. Instead, she consulted a lawyer about making changes. She wanted to reduce Mary's share to 75% and leave the remaining assets to a charity for cancer research. At Mary's death in 2005, Mabel again sought to change the distribution, making several smaller charitable bequests, with the rest of the estate going to two charities for cancer research.

When Mabel died in 2015, the successor trustee asked the court to determine the validity of the trust amendments. the trial court determined that the intent was to allow the survivor to have a power of appointment, but added that it might not be appropriate for the court to reform the trust. Instead, the court reformed Mabel's Will, incorporating her power of appointment in favor of the charities. The trustee appealed.

The Washington State Court of Appeals found that state law permits the court to reform a valid Will to conform to the testator's intent, but does not allow the court to import terms from a different document that was not executed with the formalities of a Will. There was no evidence that, when the Will was executed in 1994, Mabel intended to make the charitable distributions incorporated 11 years later. If the amendments to the trust had met the formalities required of a Codicil, it might have been possible to conclude that it was a Codicil. Lacking that, the second amendment fails, said the Court. In re Estate of Meeks, No. 35270-6-III.

If you have questions about Wills or Trusts, give us a call at 253.858.5434 to set up an appointment today. We proudly represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Interesting recent decision out of the New York Surrogate's Court regarding charitable trusts, In re Estate of Dawe, 2018 NY Slip Op. 28233.

Interesting recent decision out of the New York Surrogate's Court regarding charitable trusts:

In his Will, Alan Dawe created a Trust to continue and expand the genealogical research, archives, and website he had created for the Dawe family. Trust income could be used for administrative costs, but principal was not to be invaded. At the Trust's termination (21 years after the death of two relatives), assets were to pass to the Godfrey Library, where Dawe carried out much of his genealogical research.

Barry Dawe, Alan's brother, asked the court to declare the Trust void, on the grounds that it failed to name a beneficiary and had no charitable purpose. If declared void, the residue would pass by intestacy. Godfrey Library conceded that the Trust was invalid, but proposed that Trust provisions in the Will be excised and disregarded, resulting in the acceleration of the remainder interest to the library.

The Court found there was no substantial benefit to the public from Dawe's research, so the Trust could not be considered charitable in nature. The Court agreed that the Trust was invalid, but noted that, when asked to choose between two interpretations of a Will--one of which will result in intestacy--it is generally presumed that someone who goes to the trouble of making a Will did not intend any part of the estate to pass by intestacy. Disregarding the invalid Trust provision would not disturb Dawe's overall testamentary plan, said the Court, but allowing the residue to pass by intestacy to the family was contrary to the Will. In re Estate of Dawe, 2018 NY Slip Op. 28233.

If you have questions about setting up a Trust in your Will, charitable or otherwise, give us a call at 253.858.5434 to set up an appointment today. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Interesting Recent Decision Out of the U.S. Tax Court, Grainger v. Commissioner, T.C. Memo 2018-117.

Interesting recent decision out of the U.S. Tax Court:

Estelle Grainger created what she called her "personal tax shelter" by buying clothes at a retail store at steep discounts, contributing them to Goodwill, and claiming charitable deductions for the original retail price. She even accumulated loyalty points and dividends at the retail store where she shopped, allowing her to reduce her purchase prices even further. She deducted $18,288, $32,672, and $34,410 in 2010, 2011, and 2012 respectively. Her 2012 gift items cost her only $2,520 in cash and $3,527 in loyalty points.

The IRS reduced her deduction to her cash outlay, saying she had not used a qualified method of establishing fair market value. To substantiate her deductions, Grainger produced store receipts, marked-down price tags, and receipts from Goodwill. The Court said Grainger fell far short of substantiating her gifts, noting that because the donations were of similar items, they needed to be grouped together. Since the value of the similar items exceeded the $5,000 substantiation threshold, a qualified appraisal was required. (I.R.C. sec. 170(f)(11)(C))

Grainger failed to obtain a contemporaneous written acknowledgement of the gifts (I.R.C. sec. 170(f)(8)(B)) and the receipts did not specify the nature of the clothing or the number of items donated. The Court added that even if she had satisfied the substantiation requirements, the deductions would still be disallowed because she failed to use a "legitimate methodology" for determining fair market value. Grainger v. Commissioner, T.C. Memo. 2018-117.

If you have questions about using charitable giving as part of your tax planning, give us a call at 253.858.5434 to set up an appointment today. We proudly represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Interesting Recent Decision Regarding Charitable Bequests Out of the Ohio Court of Appeals

Massillon Community Hospital was one of three charities named to share the remainder of Kathryn Seymour's Trust at her death. The Trustee sought a declaratory judgment on the distribution of the 40% share that was to pass to the hospital, which had since been sold to a for-profit entity and was now named Affinity Medical Center.

The probate court found the language in Seymour's Trust "clear and unambiguous" that she wanted the distributions to be made only to charitable organizations. Affinity was not an appropriate recipient, the Court said. The Court awarded the hospital's share to the two remaining organizations under the cy pres doctrine.

Affinity appealed, arguing that cy pres applies only where the Trust exhibits a general charitable intent, not where the Trustor "clearly restricted the bequest to a specific limited purpose." Seymour's Trust specifically provided the hospital's share was to pass to "successors or assigns," Affinity argued. The Court noted that the cy pres doctrine, as codified, modifies the requirement that the donor show a general charitable intent. A Trustor is presumed to have had a general charitable intent when a charitable purpose becomes impossible or impracticable. Paying the hospital's share to Affinity would contradict Seymour's "overt charitable desires," the Court said. Firstmerit Bank v. Akron General Medical Center, 2018 Ohio 2689.

If you have questions about making charitable bequests as part of your general estate plan, give us a call at 253.858.5434 to set up an appointment today. We proudly represent client throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

Office Closure 2/11/19 and Possibly 2/12/1

Our office is closed and we’re working from home due to inclement weather today (February 11th) and possibly tomorrow (the 12th). Please feel free to email us or leave a voicemail at the office and we’ll get back to you right away.

Benefits and Limitations of Revocable Living Trusts

If you’re like a lot of people, you’ve probably spent more time planning your next vacation than planning your estate. But without proper planning, much of what you worked for during your life could be distributed to unintended beneficiaries or lost to unnecessary complications.

A revocable living trust is a popular estate planning tool that lets you control how your property is handled during your life and after your death. It also helps avoid probate and transfers your property quickly and privately.

The trust agreement is a legal document that partially replaces a Will. You transfer assets, such as your house, bank accounts, or stocks, into the Trustee’s name. The Trustee, usually you or someone you have confidence in, manages the property for the benefit of you or your family. It’s called a "living trust" because it’s created while you are still alive. And since it’s revocable, you can change or cancel the trust at any time before your death.

Creating a trust is a personal decision based on your own unique situation. A living trust has many benefits, but it may not do everything you need.

BENEFITS OF A REVOCABLE LIVING TRUST.

A properly executed living trust can take care of you if you become unable to care for yourself. This avoids the delay of a court-ordered guardianship. This feature highlights the importance of adequately funding your trust when it's set up. Be sure to name an alternate Trustee to manage the trust if you become unable to care for yourself.

Revocable living trusts avoid probate. Probate is the legal process that transfers property after a person’s death. By transferring legal title to the trust, the property is no longer part of your estate; it’s already been transferred.

There’s also typically no public record required, unlike with a Will. Be aware, if property is placed in the trust after your death, then there may appear in a public record.

If you want to leave assets to a child or someone who may have trouble managing money, a living trust gives you control over the manner and timing of payments. For example, you can leave money to your 12-year-old grand-daughter to pay for college or to help with a down-payment on her first house.

For most simple estates, a living trust has fewer legal formalities than a Will, making it easier to create and change.

If you own property in other states, a living trust will protect your heirs from needing to administer out-of-state probate procedures.

LIMITATIONS OF REVOCABLE LIVING TRUSTS.

Since you retain the right to use and enjoy the property, in the eyes of the IRS, it remains your taxable property. If you receive income from the trust, you must report the income on your tax return.

Revocable living trusts are expensive to set up and maintain.

You create a trust to keep control over the distribution of your property. Although some trusts can protect your assets from creditors, a revocable living trust cannot. Since this is a revocable trust, you can terminate it at will. So a creditor can force the termination to get the assets.

If you have questions about whether a revocable living trust is right for your family's circumstance, give us a call at 253.858.5434 to make an appointment today. We proudly serve clients throughout Washington and Idaho and are available to meet in person, by phone, or via Skype or FaceTime.

If you've been injured in an auto collision, we can help!

If you get in an auto collision, you may walk away from it with only minor pain or your injuries may be obvious. However, some serious issues requiring specialty care and therapy may only manifest in the days or weeks following the crash. For instance, you may suffer from back or shoulder pain that requires chiropractic care or physical therapy. It's to your benefit to take any collision seriously, and get completely checked out by a medical professional. If you don't seek adequate medical services, you leave yourself vulnerable to further pain and risk that the insurance companies will use it against you down the road. Your case may be weakened, and your compensation for damages may be less.

We all know the major things to do after a collision; take pictures, exchange insurance information, call the police and get a statement on the record, and so on. But documenting the crash only begins on the scene. To be reimbursed by your insurance company, you must carefully document your interactions with doctors, including any diagnosis or referrals for specialty care. To document who was at-fault, you'll need copies of the police report and witness accounts. We can help you track down all of this paperwork and organize it for the insurance company.

If you've been injured in an auto collision, we can help. Give us a call at 253.858.5434 to set up an appointment for a free initial consultation.

Hiring a Lawyer When You Start a New Business Venture

It's a question many people ask during startup of a business: When do they need a lawyer? Do they even need a lawyer? Can they start without one and save some money, then get one later if and when a problem arises? Unfortunately, there's not one easy answer to these questions.

Whether you need a lawyer to start your business depends in large part on what type of business you're starting. The simpler your business, the less you'll need a lawyer.

A sole proprietorship is the simplest business form. It doesn't require that you register your business with the state. No specific paperwork is required other than local business licenses, and even that can depend on the exact nature of your business and your area's unique requirements.

Partnerships and LLCs must register with the state. Documents must be prepared, such as a partnership agreement or an LLC operating agreement. You might be able to register online with your state or use an online service to register your business, but it might be a good idea to use a lawyer if your business is at all complicated.

C corporations and S corporations must register with the state as well. They must prepare bylaws and other documents, and they have a far more complicated ownership structure. You'll almost certainly need a lawyer to help you start any type of corporation, An S corporation starts as a C corporation then elects S corporation status with the IRS. If it sounds complicated, it is. You might need help.

The most common reasons for needing a lawyer are:

* Navigating the many forms and requirements of legal documents, like incorporation documents, that are involved.
* Assurance the startup is being done right.
* Enabling you to focus on other aspects of the business so you don't have to spend time learning the legal processes.
* Support with specific tasks like trademarking your name, reviewing lease documents, discussing potential legal structures, and preparing incorporation forms.
* Online legal form providers don't always do it right.
* Businesses aren't one-size-fits-all, so blanket legal documents don't always work.

If you're starting up a new business, either by yourself or with a partner or two, and you have legal questions, 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.