You've spent years building a business you're proud of. We can help you create a plan to pass it on to your kids and grandkids.

You have spent years building a business that you are proud of. As you reflect on the next phase of your life, you want to leave a thriving business for your kids and grandkids. As baby boomer business owners age into their retirement years, it is becoming increasingly important for these planning conversations to take place. A recent study showed that 51% of small business owners in the U.S. are over age 50. A similar study found that 58% of business owners do not have a specific succession plan in place. If you’re feeling unprepared, you are not alone. Here are some tips to help you get started.

BUILD A PLANNING TEAM. As you begin to think about this next phase of your life, it helps to have professional guidance and counsel to navigate the many difficult decisions ahead. A team of professional advisors can help you to:
• understand and articulate your goals (perspective)
• determine the tax, legal, and financial strategies to best accomplish those goals (technical expertise)
• help you navigate the potholes, speed bumps, and roadblocks that inevitably come up on your journey (experience).

Collaboration is an essential element in this well-functioning team. Each team member provides technical expertise in a different discipline. Furthermore, each advisor has their own set of experiences dealing with similar issues from which to draw. This provides the opportunity to bounce ideas off each other and to create a thoughtful plan that has been considered from different perspectives. We have seen these situations play out with—and without—collaboration among advisors and strongly suggest the former in finding a team that can cohesively recommend the best solution for you. While this team is important, you should ultimately identify one member to serve as the “quarterback” who will spearhead the overall team.

The value of good advice can be hard to quantify when everything goes according to plan. A well-executed plan can save you money on taxes, legal fees, and the intangible heartache along the way. Start your team with an existing trusted advisor and ask them to help build out this team.

UNDERSTAND YOUR DESIRED OUTCOMES - GOALS DRIVE STRATEGY. Once you have your planning team in place, it is time to start articulating your desired outcomes. Every business owner's priorities and goals are unique.

• From an ownership perspective, do you plan to transfer or sell ownership to your family or employee group, will you try to maximize value by selling to a third party, or might you consider some combination of the two?
• Who will run the business when you’re gone, and does that person have the knowledge and desire to take the reins?
• From a financial and estate planning perspective, how much money do you need from the business to achieve the financial goals your family desires and can the economic interest be transferred in a tax efficient way?

Your planning team helps draw out these goals by asking questions designed to get you thinking. Often, there are competing priorities which will take time to work through with your team. Once you can articulate exactly what you want, your team can put together potential strategies, pulling in additional professional expertise, and executing the agreed upon strategies.

COMMUNICATE. During the initial discovery and planning phase, it is critical to have open communication and collaboration with your advisors. Many strategies can work for any desired goal; the key is finding the one that works for you and having open lines of communication to help throughout the process. Once a strategy is agreed upon, it is important to control the narrative during this transition period. Clear communication with key stakeholders, whether with future owners and managers, your family, or your planning team, will help make this transition smoother. It is equally important that news of any change doesn’t get out to your customers or employees. Keep the conversations with your key stakeholders private and carry on with business as usual with everyone else.

DON'T WAIT. The most common mistake we see business owners make is not having a plan in place. Often, planning is done after many tax saving opportunities are either no longer available or a good opportunity was missed. Having a team in place to build the plan long before a sale or transition is imminent provides the best opportunity to take advantage of all the various strategies.

As an example, a business owner brings his team together knowing that he wants to sell his business in the next year or two. If the business is structured as an LLC, the business owner would not be able to convert it to a C-Corporation to take advantage of the Qualified Small Business Stock rules to reduce or eliminate his capital gains tax bill, potentially missing out on over $2 million of tax savings. To qualify for these savings, the owner would need to hold the stock for five years after converting to a C-Corp, throwing off his timeline of one to two years.

When people think of business succession planning, they usually think of a specific plan for retirement or passing their business to their children when they’re ready. However, the planning that is done with your team will also put into place a structure and plan for unforeseen circumstances, such as an
untimely death or disability. A well thought through succession plan will provide for financial and management stability during these stressful times.

Succession planning will help you provide a legacy for your family and your business. Starting today will give your planning team a head-start and give them every tool at their disposal to optimize your plan.

If we can be of service to you, your family, friends, neighbors, or co-workers, give us 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 (with appropriate social distancing protocols in place), by phone, or via video conference.

If you've been hurt in an auto collision, your medical records will be an integral part of your personal injury claim.

If you’ve been injured in an auto collision, medical records will be an integral part of your personal injury case. Your medical records will show what injuries you sustained, the extent of pain you experienced, what treatment was given, what ongoing conditions you have, and how the injuries may affect your life, now and in the future. Without medical records, it’s virtually impossible for your lawyer to prove that you’ve been hurt as the result of another person’s negligence.

Accessing medical records is governed by a number of laws established by the Federal Privacy Act of 1974, the Health Insurance Portability and Accountability Act (HIPAA), the U.S. Department of Health, and state laws and administrative regulations.

These days, most medical records are kept in electronic format. Because medical records are protected from disclosure by HIPAA, you will have to sign a release form to obtain copies of your medical records. Hospitals and medical clinics have their own processes, and some may charge a fee for copies. These fees may be limited by recent rules published under the HITECH Act.

Insurance companies may ask you to sign a release form authorizing them to access your medical records directly from the doctor’s office. This is a common practice in personal injury cases. DO NOT consent without talking to your lawyer first.

During the discovery phase of a personal injury case, each side in a case may make a Request for Production (RFP) to obtain medical records and other documents that are relevant to the claims being made in the case. Even if a RFP is made, however, the request could be denied. If this happens, medical records and other relevant document could be subpoenaed.

Remember, the other side will be looking for information that can damage your claim or make the severity of your injuries seem less than they actually are. Being honest and open with your lawyer is critical. If the other side tries to use personal information against you that has nothing to do with the claim, your lawyer could have it suppressed. But it’s important to be truthful.

If you or a family member, friend, neighbor, or co-worker have been injured in an auto collision and want legal advice in pursuing your claim, give us a call at 253.858.5434.

Benefits of Including a Revocable Living Trust as Part of Your Estate Plan

A Revocable Living Trust is a legal arrangement created by a Trust Agreement signed by the trust maker and trustee. It lists the property assigned to the Trust, the trustee, and the name of the beneficiaries of the property held by the Trust after the trustee dies. The trustee exercises control over the property and so it often is the same as the trust maker until their incapacity or death. We help our clients with several aspects of estate planning, including creating and funding your Revocable Living Trust.

We recommend estate planning for anyone who owns real estate, has minor children and they want to ensure that the children have trustworthy guardians after their death, and for clients with complex estates who want to avoid probate or lingering disputes among potential heirs. Many parents may assume they know who will take care of their minor children if both die. With proper estate planning, you can address just about any issue you might face at incapacity or death.

The general rule is that larger estates and those with young children are better off with a Revocable Living Trust than with just a Will. The trustee of the Trust can immediately take charge, distributing assets as needed, and that even can happen before the trust maker’s death if they are ill or incapacitated depending on how the Trust is set up.

All assets funded to a Trust avoid probate. Probate can take months or even years if the Will is disputed, delaying the distribution of property, which is a major problem when children are involved. The trustee of a Revocable Living Trust and the named guardian can quickly use Trust assets to provide for the children as instructed.

If a person owns real estate in more than one state, the property will have to go through probate in each state separately when it is in a Will. Distributing property to beneficiaries through a Trust will avoid probate and save money. Unlike a Will, Revocable Living Trusts do not generally become public after the trust maker’s death.

We can help you settle a trust. They are generally more complex than writing a Will. In order to be funded, all of the property named in the document needs to be retitled and transferred into the Trust. That can include transferring the beneficiary of a life insurance policy and placing the title of your home into the trust. It can be a more complex process than simply creating a Will, which is one reason why we recommend hiring an experienced lawyer when creating a Trust so that we can help you work out the details.

Some people confuse a Revocable Living Trust with a Will. Both allow a person to name their heirs and beneficiaries, transfer property to their children upon their death, and can be revised as circumstances or wishes change. However, Revocable Living Trusts will stay private even after a trust maker’s death, whereas a Will becomes a matter of public record.

If you are interested in having a Revocable Living Trust created for your estate, give us a call at 253.858.5434 to see how we can help. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.

Auto collisions bring up a bunch of questions. Fault? Damages? Who pays for medical bills? How much is "pain and suffering" worth? Lost wages? We can help you get answers.

An auto collision brings with it a host of questions. Who is at fault? Who pays for damage to my car? Who will pay for my medical bills? How much should I get for pain and suffering? Can I be reimbursed for lost wages? An experienced lawyer can be extremely helpful in negotiating the often chaotic and confusing world of insurance claims and settlements.

Because most personal injury lawyers work on a contingent-fee basis (i.e., they only get paid if there is a successful resolution to your claim), there is often little incentive to try to handle these types of claims on your own, unless no injuries or serious damage were involved and a settlement would be very small. If you're injured in an auto collision, then hiring a lawyer will almost always ensure a much better settlement.

Hiring a lawyer to represent you after an auto collision means you will have a professional working for you--one who is knowledgeable about the relevant laws and procedural rules that may affect your case. A lawyer can advise you of any time limits (called statutes of limitations) that can bar you from filing a lawsuit against the at-fault driver. For instance, here in Washington, you must file your lawsuit within three years of your collision or be forever prohibited from filing suit. In Idaho, it's two years. A lawyer will also be able to inform you about any special exceptions to the statute of limitations--for minors, for example.

Your lawyer can file a lawsuit on your behalf and will know how best to mitigate any possible defenses raised by the other side. In addition, once your case gets under way, your lawyer will play an invaluable role in preparing your case for trial--and even going to trial if your case doesn't settle. Even though a lawsuit is rarely necessary, the threat of legal action offers strong leverage when negotiating a fair settlement.

Finally, and perhaps most importantly, having a lawyer who is knowledgeable about the law evens the playing field, especially when you are going up against the experience and vast resources of a large insurance company.

There is a lot of work that goes into negotiating an insurance settlement and a personal injury lawsuit to trial. After you have been in a collision, taking on this time-consuming work may be the last thing you want to do, assuming you're able. A lawyer can do it all for you. Whereas this may be your first time dealing with the ins and outs of an injury claim, personal injury lawyers have dealt with all manner of claims and a variety of insurance companies. They have experience obtaining the necessary evidence to support your claim, including gathering police reports, witness statements, medical records and bills, and employment and lost wage information.

Your lawyer will also be able to organize the evidence and prepare a settlement demand for the insurance company. If you are unable to settle your case, your lawyer can take care of filing the necessary paperwork to start a court case and can deal with the defense attorneys on your behalf. Having someone knowledgeable handling the hard work of your case eases the burden on you, which is especially important if you have been seriously injured and are trying to recover from your injuries.

Perhaps the most important way a lawyer can help you with your injury case is by being your advocate. This means that your lawyer acts on your behalf and for your benefit throughout the entire claims process (negotiating with the insurance company) and even in court if a lawsuit becomes necessary. They will be your champion before the judge, jury, and other lawyer, making sure that your side of the story is heard and that you are compensated for all of your losses.

Having an experienced and articulate advocate working for you is essential in obtaining a reasonable and fair resolution in your personal injury case. If we can be of service to you, your family, friends, neighbors, or co-workers, give us call at 253.858.5434 to set up an appointment today.

When most people think about estate planning, their first thought is a Will. And then they think, "I should get one of those someday." Estate planning means more than just a Will. Don't put it off.

When most people think about estate planning, their first thought is a Will. A common next thought is, “I should probably get one of those someday.” The unspoken implication, of course, is “but not today.” Putting off estate planning seems a popular – but ill-advised – undertaking. Moreover, estate planning means more than just a Will. It is important to note that if you were to pass away before you prepare an estate plan, State laws fill the gap by directing what happens to your assets. So, you may have one of two types of estate plans: a plan that you have intentionally set in place via a Will or Trust, or a default plan, called “intestacy,” in which State law determines where your assets will go.

Similarly, if you become incapacitated and have not created and funded a Trust or executed a Durable Power of Attorney, the State can intervene to appoint a legal guardian of the person and guardian of the estate. Guardians may be appointed by the court to take charge of your affairs, whether that means making healthcare decisions or managing your assets. If you prefer to be the one to determine what happens if you become incapacitated or when you die, rather than leaving it to State courts or statutes, here are the basic estate planning documents to have drafted by an experienced estate planning lawyer.

WILL. Your Will becomes effective at your death. If you are a parent, your Will can identify who the guardians of your minor children will be at your death. It also names a Personal Representative (formerly called an "Executor") who is in charge of collecting and distributing your assets, paying bills that were incurred prior to your death, etc. A Will can also provide for Trusts that could provide tax planning or other benefits. And, most importantly, a Will disposes of your assets to the people or charitable organizations you have chosen.

HEALTHCARE POWER OF ATTORNEY: This document names a person (an “attorney-in-fact”) to make healthcare decisions on your behalf if you become incapacitated. Because of healthcare privacy laws, this is an important document to have because it allows the named person access to your medical information so they can make informed decisions regarding your healthcare, and possibly end-of-life planning.

DIRECTIVE TO PHYSICIANS/"LIVING WILL": This document states your wishes regarding extraordinary measures necessary to keep you alive due to illness or injury. When preparing this document, consider how you feel about receiving artificial nutrition and hydration, CPR, and oxygen and for how long and under what conditions.

DURABLE POWER OF ATTORNEY: This document names an attorney-in-fact to take care of your financial affairs. You may give this person the power to make decisions immediately or only in the event of your becoming Incapacitated. The attorney-in-fact can hold limited or broad powers to act. Examples are making gifts on your behalf, selling property, funding a trust, or accessing your accounts to
pay your bills. Given the extent of the powers usually authorized, it's important to name a trustworthy
person for this role.

REVOCABLE LIVING TRUST: Another document that people may use to transfer assets at death or plan for incapacity is a Revocable Living trust. This Trust may be as effective as a Will for directing the disposition of your estate, tax planning and can also take the place of a Durable Power of Attorney. A Trust only works if it is properly funded since assets must be titled in the name of the Trust. A Trust also has the benefit of
avoiding probate, which allows for greater privacy.

KEEP YOU ESTATE PLAN UPDATED. It's important to understand that an estate plan is not a one-time undertaking. Some key events that should lead you to update your plan include:

* Changes in the law.
* Changes in marital status.
* Changes in family status, including having children or having beneficiaries pass away.
* Changes in wealth.

USE PROFESSIONAL ADVISORS. Have a lawyer draft your estate planning documents. They touch on complicated tax and legal issues and language used is critical to carry out your intent. You may also consider consulting with a tax advisor and financial planner to address possible tax consequences.

If we can be of service to you, your friends, family, neighbors, or co-workers, 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 (with appropriate social distancing protocols in place), by phone, or via video conferencing.

Estate Planning for Global Families Immigrating to the United States

The world is getting smaller and more interconnected. Here in Washington, our historic ties to other Pacific Rim countries grow stronger each year as more global families make this area their home. Once they’re here, it’s important that they complete their estate plans, including (at the very least) Wills, Powers of Attorney, and Health Care Directives.

Those who have not yet arrived in Washington should consider pre-immigration estate planning. Such planning generally focuses on ordering a family’s legal and financial affairs to maximize asset protection and minimize tax, before family members obtain permanent resident status (commonly known as a Green Card) or physically arrive in the U.S. For example, families might consider realizing capital gains tax in a lower tax jurisdiction before arriving in the U.S. and becoming subject to U.S. income tax. Or, for asset protection and transfer tax purposes, assets transferred to beneficiaries or to a trust for beneficiaries before the global family moves to the U.S. will (if done properly) gain creditor protection and avoid state and federal estate tax on future transfers.

Some global families may desire to own a second home or investment property in Washington, but not become residents. They should know that Washington imposes an inheritance tax on Washington real estate owned by non-resident families. The exemption is $2.193 million, but the computation of the tax may not be straight-forward for nonresidents. Similarly, federal gift and estate tax applies to assets located in the U.S., including real estate. Unlike U.S. citizens and residents who have an $11.58 million lifetime gift and estate tax exclusion, non-U.S. residents have a mere $60,000 exclusion from the federal estate tax. In some cases, this exclusion is increased by an estate and gift tax treaty. In other words, absent an applicable tax treaty, the value of any Washington real estate held by a non-U.S. resident over $60,000 will be subject to estate tax, at a maximum federal estate tax rate of 40% (and for higher value property, a maximum combined federal and Washington estate tax rate of 52%). The estate tax can be avoided entirely - or at least decreased - by purchasing the property in a trust or foreign corporation or by structuring the loan properly. If the tax cannot be avoided, the family may purchase sufficient life insurance to cover the tax. Again, more options are available if estate planning is contemplated before a global family acquires U.S. real estate.

If one or both of the spouses are non-U.S. citizens, they should be careful about transfers between them. The “marital deduction,” which eliminates any gift or estate tax on spousal transfers regardless of the amount, does not apply if the transferee spouse is not a U.S. citizen, even if they have a Green Card. Thus, titling assets in the spouses’ joint names can result in inadvertent gifts if contributions are unequal. At death, if the surviving spouse is a non-U.S. citizen, the excess above the estate tax exclusion will trigger tax due at the death of the first spouse. The estate tax can be deferred by putting the assets into a trust with special restrictions, called a qualified domestic trust (QDOT). That said, whether the QDOT is the appropriate choice depends on each family and their situation.

Those leaving the U.S. should know about the expatriation tax. U.S. citizens need not worry about this unless they are renouncing citizenship. However, long-term permanent residents who are leaving the U.S. can face this tax upon relinquishing their Green Cards, if they meet a certain income tax or net worth threshold. The expatriation tax imposes immediate income tax upon expatriation and a special estate and gift tax later if the expatriating person gifts or bequeaths assets to U.S. beneficiaries. People who obtain Green Cards through work often decide to return to their home country after retirement. Without tailored legal and tax advice, they may face unpleasant tax surprises.

Finally, it is important for anyone who owns assets outside of the U.S. to understand their tax and reporting obligations. In many cases, ownership of foreign bank accounts and other foreign assets must be reported to the IRS regardless of whether they produce income. Failure to report can lead to substantial financial penalties or even criminal liability. Fortunately, in some cases, taxpayers whose failure to report is non-willful can remedy their delinquent reporting with no or minimal penalties through a streamlined procedure.

Though global families face some unique challenges in their estate planning, we can help them navigate the myriad of state and federal rules. If we can be of service to you, your family, friends, neighbors, or co-workers, give us a call at 253.858.5434 to set up an appointment today.

Revocable Living Trusts are an excellent way to ensure that your family will receive the assets you've provided for them quickly without the need to go through the probate process.

When you leave an inheritance for your loved ones, you want them to be able to enjoy that gift quickly, with minimal expense or delay. Revocable Living Trusts are an excellent way to ensure that your family will receive the assets you’ve provided for them quickly without the need to go through the probate process.

WHAT IS A REVOCABLE LIVING TRUST? The Revocable Living Trust (or "RLT") is an estate planning instrument that provides the benefits of a trust to your heirs, while still permitting you to control your assets during your lifetime. When you use a Will to provide for your heirs, they must first submit the Will to probate. There are times that this process can cost thousands of dollars in court costs and attorneys’ fees, and it regularly lasts a year or longer. With an RLT, administration can occur quickly, bypassing the probate process and court system entirely. Trusts also offer added privacy for grantors and beneficiaries since, unlike Wills, they do not become public record.

RLTs also offer you a way to determine how your assets are managed in the event that you become incapacitated. Unlike a Will, Trusts offer you the opportunity to detail your wishes for your care should you become incapacitated, while also allowing you to choose someone you can count on to manage your finances as Trustee, and bypass the need for court involvement in the form of a guardianship.

HOW ARE REVOCABLE LIVING TRUSTS CREATED? In a basic Trust, the grantor provides the assets for the Trust, to be managed by the Trustee, for the benefit of the beneficiary. With an RLT, the grantor transfers title of their assets to the Trust, but continues to have access to and control over those assets until their death. Upon passing, the Successor Trustee chosen by the grantor to administer the Trust will distribute the funds to the beneficiaries according to the grantor’s wishes as they are laid out in the Trust documents.

AN IRREVOCABLE TRUST MAY BE A SOLUTION FOR CERTAIN LARGE ESTATES. While RLTs can provide many cost-saving benefits, they do not provide relief from estate taxes. If you have a substantial estate that may be subject to this tax, consider creating an Irrevocable Trust, such as a Grantor Retained Annuity Trust, a Charitable Remainder Trust, or an Irrevocable Life Insurance Trust. Placing assets in an Irrevocable Trust can protect those assets from being subject to estate taxes, and will prevent the income they generate from being attributed to you as taxable income. Unlike the RLT, however, grantors are not able to access the funds placed in an Irrevocable Trust after creation. A lawyer can help you decide if a trust would best fit your needs and if so, what form of trust would be best for you, as well as what other forms of asset protection may be available.

Make sure that your estate plan is crafted by an experienced lawyer so that you can rest easy knowing your loved ones will be cared for in the manner you intended after you are gone. Contact us for a consultation on your estate planning needs at 253.858.5434.

If you've been hurt in an auto collision, you may have what insurance companies call a "MIST" case. Hiring a lawyer to build and present your MIST case helps.

If you've been hurt in an auto collision, you might have what insurance companies call a "MIST" case. MIST stands for "minor impact/soft tissue." These types of cases arise when a low-speed impact causes little property damage yet results in one or more connective tissue injuries. In fact, insurance companies such as Allstate, State Farm, Farmers, and Progressive might use an arbitrary property damage figure, such as $1,000, to officially label a claim as a MIST case.

Insurance companies will also often take a hardline stance with these cases by claiming that accident victims cannot possibly sustain a significant injury from a minor collision that results in minimal property damage. Fortunately for victims of MIST cases, we have experience proving insurance companies wrong.

The fact is that there is no scientific evidence to support an insurance company’s claim that MIST cases are invalid. It is simply a tactic used by the insurance companies to minimize a claimant’s injuries and personal experience. The ultimate goal here is for the insurance company to pay as little as possible for a MIST case, or outright dismiss the claim entirely.

We have resolved a significant number of MIST cases on behalf of our clients. In the majority of cases, clients who have been involved in a MIST case suffer one or more of the following soft-tissue injuries:

* Whiplash – The most common auto collision injury, whiplash occurs when there is a sudden jerking of a person’s neck, often seen in rear-end collisions. The motion of the neck is akin to the cracking of a whip, resulting in a cervical sprain that can cause headaches, vertigo, and ongoing physical pain in the neck and back area. Whiplash treatment may involve a neck brace and/or ongoing physical therapy.

* Sprain – The most common site of a sprain for auto collision victims is the wrist, knee, arm, and/or ankle. Sprains occur when a ligament is stretched or torn. Sprains are often treated with braces, though we have also seen more serious sprains require physical therapy and/or surgical intervention.

* Bruising/Contusions – When capillaries under the skin rupture, a bruise is the end result. Bruising usually occurs when you strike the inside of your vehicle with one or more parts of your body. Often multi-colored, a bruised area can remain sore and tender for several days. Severe bruising may persist for weeks.

* Strain – Sometimes confused with sprains, a strain occurs when a muscle or tendon is stretched or torn.

Why do insurance companies not take MIST cases seriously?
Unlike a collision that leaves a victim with a broken bone or laceration, MIST cases leave little to no trace of a visible injury. Insurance companies will exploit this fact and figure that juries will not be as likely to pay a claim for an injury they cannot see.

Ask anyone who has suffered from a connective tissue injury such as whiplash or a strained back, and they will tell you that the pain from these injuries can be equal to or more burdensome than certain broken bones. After all, once a broken bone is placed in a cast, the pain is greatly reduced or is non-existent. By contrast, there is not always a “go-to” treatment for a connective tissue injury and the pain can linger.

With all this in mind, it is not uncommon for a MIST case to require litigation, as insurance companies may simply refuse to recognize your injuries with the seriousness they deserve.

The compensation we typically seek for MIST clients may include any of the following:

* Medical expenses
* Lost wages
* Pain and suffering

No matter how similar two cases may seem, each case is unique. For this reason, it is possible that you may be able to seek additional types of compensation than those listed above. We can help determine what types of compensation you may ultimately receive.

Sometimes people may believe they can simply outwait soft-tissue pain or “soldier through it.” Unfortunately, this approach will backfire for people who have MIST cases. Medical documentation and testimony from doctors is a must in all injury claims, but it becomes especially important in MIST cases. Without it, you stand no chance at ever being properly compensated for your injuries.

In addition to being checked out by your doctor, you must also follow their instructions and not miss any future appointments for therapy and/or future check-ups. We also recommend that you keep a journal documenting your pain and how it is affecting your daily life. But even if you take these steps, it is still possible that your claim will be undervalued. This is why we recommend that you hire a lawyer.

Having a lawyer build and present the MIST case on your behalf will not only increase the chances that you will be properly compensated, it also provides you with the leverage of taking the insurance company to court if needed. If the insurance company has classified your claim as a MIST case, you should seek the advice of a lawyer right away. If we can be of service to you, your family, friends, neighbors, or co-workers, give us a call at 253.858.5434 to set up an appointment today..

Do you have kids? Do you own a house? If your answer is yes to either one of these questions, then you need an estate plan.

Do you have kids? Do you own a house? If your answer is yes to either one of these questions, then you need an estate plan. The most basic estate plan includes the following documents: (1) a Will; (2) a Durable Power of Attorney; (3) a Health Care Power of Attorney; and (4) a Directive to Physicians (commonly called a "Living Will"). If you're married, your estate plan may also include a Community Property Survivorship Agreement. If your children are still minors, your Will may include a designation of a Guardian and may also set up a Trust to manage your children's money. Parents of minor children can also sign a Power of Attorney for Children's Health Care. In some family's circumstances, a Revocable Living Trust may also be called for. These are just the very basic tools and techniques of estate planning.

Every family is unique and different. If you have questions about an estate plan that fits your family's situation, 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 (with appropriate health and safety precautions in place), by phone, or via video conference.

The "McDonald's Hot Coffee" Case and the Myth of "Frivolous" Personal Injury Lawsuits

In case you're one of the people who think personal injury lawsuits are "frivolous," remember that McDonald's used to serve their coffee at 190 degrees, which is hot enough to leave 3rd degree burns in just three seconds of contact with human skin. McDonald's knew this and decided to serve their coffee at 190 degrees because it had a longer shelf life than serving it at the standard 160 degrees. They calculated that burn-related lawsuits would cost less than just wasting coffee that wasn't good anymore. THEY RISKED PEOPLE GETTING DEADLY BURNS TO SAVE MONEY.

And when the big lawsuit inevitably happened, they slandered the elderly victim, who had 3rd degree burns over 16% of her body, including her legs, abdomen, and genitals, and nearly died from shock; they painted her as stupid and made her into a joke for not realizing that coffee would be hot. The insurance industry has since done a brilliant job of using the "McDonald's hot coffee" story to perpetuate the idea of frivolous lawsuits brought by people trying to scam the system.

Stella Liebeck, the plaintiff in that case, literally just wanted McDonald's to pay her $20,000 medical bills because Medicaid wouldn't cover them. Then McDonald's, the insurance industry, and the media made her out to be a greedy scammer. This is why we think personal injury cases are important. People who have been injured because of someone else's actions (or inaction) deserve justice.

Failure to create a proper estate plan can not only increase the cost of administering an estate, but also lead to unintended consequences, like paying more taxes.

The death of a loved one can be one of life’s most difficult events. People generally agree that a smooth transition of assets after a death is desirable. And yet many people fail to plan and turn what could be a smooth transition into a painful process. Failure to plan can not only increase the cost of administering an estate, but also lead to unintended consequences such as paying more taxes.

Laws enacted in 2017 doubled the amount one could gift during life or leave to heirs upon death. That amount was increased from $5 million to $10 million per person. After adjusting for inflation, that amount rose to $11.58 million per person in 2020. Coupled with “portability” - which enables a married couple to effectively double this amount - a married couple can now give away $23.16 million during life or upon their deaths without facing a federal gift or estate tax obligation.

This raises the question of whether creating tax-planning trusts have become a thing of the past. Not in Washington state.

Washington still has its own estate tax, which this year impacts estates over $2.193 million. Because the revenue from the Washington estate tax is earmarked for higher education, it is not likely to be repealed any time soon.

Many married couples mistakenly believe that they can double the Washington exemption like they can with the federal exemption. This is not true without tax planning. If all property were to pass to the surviving spouse outright, when that surviving spouse dies later, the surviving spouse only has his or her exemption amount. There is no “portability” of the Washington exemption amount like there is at the federal level. This can take many people by surprise.

The bottom line is that if the total value of a Washington resident's estate exceeds $2.193 million - including real estate, life insurance proceeds, retirement, bank and investment accounts – then they should consider tax planning to address the Washington estate tax. Income tax considerations should also be addressed.

It is possible to structure an estate plan to include assets in the federal estate of a surviving spouse and to receive a basis adjustment while keeping those same assets out of a surviving spouse’s estate for Washington purposes. Why is this important? Because it can save capital gains tax as well as Washington estate tax.

An additional planning technique is to give money away during one’s lifetime. Although Washington has an estate tax, it does not have a gift tax. Consider whether your Durable Power of Attorney for financial decisions includes a clause that would permit gifting and how much. A law passed in 2016 limits gifts to the annual exemption amount ($15,000 this year) unless otherwise specified. While in the past, gifts were often limited to the annual exemption amount, now that people can give away up to $11.58 million during their lifetime, they need not necessarily feel constrained by the $15,000 amount. Although gift tax returns must be filed for gifts above that amount, it only reduces what one has left to give and with the current $11.58 million gift and estate tax exemption amount, there is room to spare.

Although gifting assets during life can be an effective way to reduce one’s taxable estate, it’s important to determine which assets to give because of the impact on basis and capital gains tax. For example, if stock bought for $10 a share is given away when it is worth $110, the receiver would have $100 of built in capital gains that is subject to capital gains tax when the stock is sold. However, if the stock is inherited after the giver dies, there would be a step-up in basis to the date of death value, therefore avoiding the built-in capital gains. Engaging the assistance of a competent professional can help with the analysis of everyone’s particular situation.

Tax planning can be done in either a Will or a Revocable Living Trust, which puts all of one’s assets into a Trust. Estates in Washington can go through probate efficiently without court supervision. This surprises people who have moved to Washington from other states where Revocable Living Trusts are necessary to avoid a costly court-supervised probate administration. Nonetheless, there are some circumstances that lend themselves to a Revocable Living Trust plan. Difficult-to-transfer assets, out-of-state property, second marriages, and privacy concerns will weigh in favor of such a plan. But for those people without such concerns, a will-based plan can be more cost effective and simpler.

Whether you chose a Revocable Living Trust or a Will, planning for both Washington estate tax and capital gains tax can be a complex analysis, unique to your particular situation. If we can be of service to you, your family, friends, neighbors, or co-workers, give us a call at 253.858.5434 to set up an appointment today.

Proper estate planning can easily eliminate most trust and estate disputes and avoid needless litigation.

Many trust and estate disputes occur simply because someone failed to properly plan for their demise or incapacity. Often, proper estate planning can easily eliminate needless litigation.

Coordinating your beneficiary designations with your estate plan ensures that assets such as life insurance, retirement plans, bank accounts, and other financial assets pass to the intended recipient. Assets that pass by beneficiary designation are contracts between you and the retirement plan custodian or life insurance company and will pass directly to the named beneficiary, regardless of what your Will says.

One of the most frequent problems relates to accounts held in "joint tenancy with right of survivorship." Many people do not realize that listing a joint tenant with right of survivorship on their bank account means that person is now a joint owner of that account and when the original account owner dies, the person listed as joint tenant is presumed to be entitled to the balance of the account. For example, your carefully crafted estate plan that names a trust for the benefit of your spouse could be inadvertently thwarted if all of your assets are held in a bank account with your children from a prior marriage as joint tenants with right of survivorship. In that case, your assets would pass to your children and nothing would pass to the trust created for your spouse.

This accidental disinheritance is often found when someone adds a child to their bank account. Joint tenancy with right of survivorship is the default account titling for many banks for accounts that are owned by two or more people. In fact, some institutions advise that to prevent the account from being frozen upon death, it is preferable to add a joint "owner," instead of just an authorized signor. In a situation where one child is helping to pay the bills, there may be a dispute over the intent of adding the child as a joint owner to the account. You should be clear, in writings or other asset statements, whether the addition of a child to the bank account was for convenience only, or if the intent was truly to make a gift to the child of the remainder of the account at death, to the exclusion of other children or beneficiaries.

Issues can also arise if you are married but have children from a prior relationship and you do not execute estate planning documents or you plan as if the family is not blended. If you die without an estate plan, the state laws control how property is distributed. Without a Will, if you leave behind a spouse and children from a prior relationship, the surviving spouse is entitled to all of the community property and one-half of your separate property, leaving your children with only half of your separate property.

Alternatively, relying on a plan in which the new spouse receives everything outright under the terms of the Will may significantly reduce or eliminate any inheritance received by your children from a prior marriage. The surviving spouse now owns all of the property and can change their Will at any time to exclude your children from their plan. Including relatively simple trust language in your Will allows you to provide for your spouse as well as for your own children.

In addition to proper estate planning, communication plays a vital role in avoiding estate disputes. Descendants may have unrealistic expectations about how much they will receive or be disappointed by not getting what they feel they are entitled to receive. If you are intent on disinheriting a child or other close friend or relative, let your intentions be known as to why you are not leaving them any assets. Thinking, “they know what they did,” will not stop an upset heir from initiating litigation to recover what they believe is their fair share of the estate. A simple explanation in your Will can answer a lot of questions. Such an explanation could be, “due to the numerous gifts I made to Joe during my lifetime, I leave nothing to Joe under my Will.” Or, a detailed letter that is signed and dated by you and kept with your Will adds certainty to the question of your intent after you have passed.

Planning ahead and being clear on your intentions will go a long way to keeping your estate out of an extended court fight once you are gone. If you have questions about these or other estate planning matters, give us a call at 253.858.5434 to set up an appointment today.

Phase 2 of Washington's Safe Reopening Plan and the Americans with Disabilities Act

The Washington State Emergency Management Division reports that some people are claiming that they will cite the Americans With Disabilities Act as a reason for them to walk into any business they choose without a mask. They’ve printed little home-made cards and are keeping them in their wallet or purse. The Governor’s mask mandate does have exemptions, including people with certain disabilities or health conditions. But a business or government agency is not forced to allow you inside. They can make reasonable accommodations for people with disabilities and health conditions. Examples include:

* Allowing a person to wear a scarf, loose face covering, or full-face shield instead of a face mask;
* Allowing customers to order online with curbside pick-up or no contact delivery in a timely manner;
* Allowing customers to order by phone with curb-side pick-up or no contact delivery in a timely manner;
* Allowing a person to wait in a car for an appointment and enter the building when called or texted; or
* Offering appointments by telephone or video conferences.

There are many fake ADA flyers and posts going around that were never issued by any governmental agency. For more on the myths and facts about cloth face coverings, visit the Washington State Department of Health's web site.

Using Social Media While Your Personal Injury Case is Ongoing. Just Don't Do It.

Sometimes social media can inadvertently come back to hurt you. This is especially true for injury victims who use social media. We advise our clients to exercise extreme caution when posting to social media while pursuing an injury case. If you say something on social media that works against your case, it can hurt your chances of recovery. You might say something that calls the facts of the case into doubt. You might say something that makes you look bad. You may end up saying something on social media that contradicts what you’re claiming in the case. For example, if you’re claiming that you have a broken arm, but you post on social media that you’re going bowling, the defense is going to challenge your injuries. When you have an injury claim, you must always be completely honest about your injuries and losses. Contradictory social media posts can completely ruin your case.

Check-ins on Facebook and other sites can show that you’re participating in activities that contradict the injuries you’re claiming. For example, if you’re claiming you have limited mobility, you shouldn’t check in at your yoga class. Location posts can count as evidence against you.

Social media posts can also inadvertently show the other side what you’re physically capable of doing after your injury. If you post a picture of your children on the ski hill, the other side might ask who took the picture. If the answer is you, they’ll have proof that you’re on a ski hill. What you post can call your case into question in ways you may not be able to predict.

Even the things that witnesses post on social media can hurt your case. They might contradict your claims about your injuries. They might post pictures of you at family events, giving your kids or nieces and nephews piggyback rides. They might make statements about how much money you want to get paid for your losses. These things can hurt your evidence in the case and paint you in a negative light.

At trial, the rules of evidence say that what a person says outside of court typically isn’t admissible at trial. Out of court statements are often categorized as inadmissible hearsay.
However, there’s a routine exception for the statements of a party. When you’re bringing an injury claim, your statements to others outside of court are admissible against you because you’re a party to the case. Your social media posts count as statements, and that’s why they’re admissible against you in court. Statements by family and friends on social media are also admissible if they contradict the same person’s statement in court.

You might think that you can still use social media during your injury case if you’re really careful. You might assume that you can carefully filter your social media posts by reading everything you post with a critical eye. Unfortunately, it’s all too easy to say something that you don’t realize may be used against you. You never know how the other side is going to try to twist your words and your posts. Trying to monitor your social media use is too risky when your recovery is on the line.

Even if you make your Facebook page viewable by your friends only, there are things that the other side can do to see what you post. First, if they know any of your friends, they can ask your friends to give them the information voluntarily.
Second, they can take advantage of the rules of discovery. These rules can require you to produce records. The other side may demand that you provide copies of your social media records even when your account is set to private.

A social media squabble can complicate your case. You and your lawyer may have extra trips to court to hash out whether you have to produce social media records for the other side. On the one hand, courts have ruled that there’s no social media privilege. You can’t get out of producing relevant social media records by setting your status to friends only or private.
However, the key to social media discovery is showing relevancy. The discovery rules don’t allow parties to demand large amounts of records in the hopes that they’ll find something helpful for the case. That’s called a fishing expedition. These conflicting legal priorities can result in a court battle that makes your case more complicated and stressful.

So if f you’re bringing a personal injury claim, don’t post anything personal on social media. If you absolutely must use social media, limit your social media use to liking other people’s posts and sharing news articles.

You should see what’s out there about you by searching for your own name. Ask friends and family not to mention your case. Your best bet is to lay low on social media sites until your case is fully resolved.

If you have been injured in an auto collision and are pursuing an injury claim, it’s essential to contact a qualified lawyer. Your lawyer can help build, file, and present your case. Additionally, your lawyer will provide expert guidance at every stage of your case. This guidance is crucial to helping you gain an understanding of the things you should avoid to make your case as simple and successful as possible. That includes helping you make sure to avoid social media pitfalls during your case. Don’t let a simple mistake compromise your ability to recover the compensation you need to get back to your life.

If you, a friend, family member, neighbor, or co-worker has been injured in an auto collision, give us a call at 253.858.5434 to set up an appointment for a free initial consultation.

Advising Clients on Matters Related to Forming a New Business

We advise clients on all matters related to business formation, including taxation and related liabilities that may impact a business’s profit stream in the future. These factors are evaluated when we help clients form their businesses, franchise, or nonprofit companies. In Washington, the types of business entities can include:

* Sole proprietorships
* S corporations
* C-corporations
* Limited Liability Companies (LLCs)
* General Partnerships
* Limited Partnerships
* Limited Liability Partnerships
* Nonprofit Organizations
* Professional Service Corporations and Limited Liability Companies

At the outset of a new business, we assist clients in choosing the best business legal form for their needs, which usually includes addressing the following considerations:

* Type of business and employee considerations – will the business have employees, or is it primarily an investment vehicle?
* Tax considerations – will the pass-through tax considerations available for those seeking S Corp tax treatment be desired?
* Future financing and equity considerations – will the company want to issue equity later to raise additional capital or grant equity interests to management or employees?

These are only a few of the considerations that should be considered in order to determine what type of legal entity will be best. We advise clients of the matters that are most important to them so that they can make the choice for the best legal entity based upon their business. We then prepare and file all necessary corporate and legal documentation required.

As companies grow and circumstances change, a number of events can occur that may impact ongoing business operations (particularly in a closely-held company), such as:

* The need to raise additional capital
* The death or incapacitation of a key owner
* The desire of one owner to sell their equity interests
* An intractable deadlock on a key management issue.

In the business formation stage, we routinely advise new business owners on these and other significant events that could potentially occur. We help business owners address these matters, typically in shareholder, buy-sell, or other agreements. Such agreements can be critical, so that if one of these events occurs, a legally agreed-upon process can be implemented, rather than costly and disruptive litigation.

After the business is formed, we represent business owners and executives by advising them on management and governance of their companies. We work closely with clients from start to finish to ensure that they understand their rights and duties within the corporate structure and the legal basis for the type of entity used to form their companies. We provide continued support after formation to ensure best practices are adopted for entity governance.

Whether your business goals involve forming a new start up, merging with a larger company, or purchasing a competitor, we can provide you with the insight and guidance you need to ensure a smooth transaction. Give us a call at 253.858.5434 to find out how we can be of service.