Estate planning is a little different for artists, authors, musicians, and songwriters.

Estate planning is a little different for artists, authors, musicians, and songwriters. These clients spend so much time and effort in creating their work, yet most don’t consider what will happen to their body of work, and their legacy, after they die. Mortality will catch up with us, and often unexpectedly, so it pays to think about what you want to happen to your work after you are no longer able to create or control the process, publication, and distribution, as well as providing a guide to your heirs as to how you want to be remembered. This becomes particularly important when other people or organizations have a claim to a portion of your assets, such as a spouse, children, manager, agent, publisher, gallery, record label, or co-writers and partners.

There is a lot to consider in estate planning for artists that would not apply to traditional estate planning. Like all legal issues, the process can seem daunting because most people are not well-versed in the legal jargon (and let's be honest, hiring a lawyer can be expensive) but just think about what can happen if you don’t provide guidance.

* What will happen to your body of work or other assets like your expensive equipment, sketches, notes (things that represent your process), computer, instruments, materials, or even your studio?

* Who will make sure that your assets are distributed according to your wishes and not by state law?

* Depending upon your work’s value, some serious challenges could break out among your relatives, which you probably want to avoid.

* You may want some of your work to be donated to a charity or some other persons or organizations. Without a legal document, it won’t happen, even if you have made your wishes known verbally to someone.

* If any of your work is under contract or license, your beneficiaries need to know about it.

* You probably have a lot of unseen or unheard work that may have value today or in the future, so your breadth of work should be cataloged and distributed according to your wishes.

* Tax implications from giving your artwork or other assets to your beneficiaries may make it difficult for them to accept. Tax liabilities can be limited through proper planning.

* The publishing rights and copyrights to your work are assets entirely separate from the work itself. Not all non-artists realize this.

* Your family and friends may not be familiar with your body of work and may need help from an "artistic advisor" like an agent, manager, curator, publisher, instructor, or fellow artist in cataloging and valuing work.

While it is easy to put estate planning off, it is best to begin planning for your legacy at the beginning of your career. Whether you are a mid-career artist showing, publishing, or performing regularly, or an emerging artist just starting out, top on your list of priorities should be a plan for the preservation of your body of work and dissemination of your assets. At the very least, you should become familiar with the estate planning process so that you can identify the right time to formally prepare and know the documentation you will need.

We have been representing artists, authors, musicians, and songwriters for over 20 years. If we can be of service to you, your family, or friends, give us a call at 253.858.5434 to set up an appointment today.

Everyone needs an estate plan, but we recognize that every client's situation is unique. There is not a "one-size-fits-all" rule about when certain estate planning tools are necessary.

Everyone needs an estate plan, but we recognize that every client's situation is different. There is not a "one-size-fits-all" rule about when certain estate planning tools are necessary, including the need for a revocable living trust.

TRUSTS. A revocable living trust (sometimes us lawyers get fancy and use the Latin term, an "inter vivos trust") is established during the client's lifetime. The client holds assets in the name of the trust while they are alive and usually reserves the right to change the trust. Because the client may serve as trustee and beneficiary, most clients find no difference between managing the trust and managing their own property outside of trust. Even though property is held in the trust's name, the client retains the right to buy, sell, or give property away.

WHO NEEDS A TRUST? When we meet with a client, one of our jobs is to determine whether a trust is right for the client, and this depends on several factors, such as:

* Second Marriage

* Incapacity Planning

* Special Needs Child or Beneficiary

* Divorce

* Minor Children

* Large Settlement Recipient

* Death of a Spouse or Beneficiary

* Children are not Self-Supportive

* Spendthrift Issues

* Large Inheritance Recipient

* Owning Real Estate in More than One State

BENEFITS OF A REVOCABLE LIVING TRUST. A trust avoids probate. When a Trustor dies, the successor Trustee immediately takes over management of the trust and administers the trust according to its terms. Court involvement is not required.

A trust avoids guardianship. If a Trustor becomes incapacitated, the successor Trustee takes over management of the assets without court involvement. Additionally, if used with a power of attorney, the Trustee and attorney-in-fact are not required to account to the court annually, as they would have to in a guardianship proceeding.

A trust maintains anonymity. Unlike a Will, which is filed with the court in a probate proceeding, a trust does not become a matter of public record.

A trust helps manage the client's affairs. If a client becomes incapacitated, a trust allows the successor Trustee to step in and manage trust assets. The trust may also allow the temporary appointment of someone to manage trust assets in the client's absence. This may be necessary, for example, if the client takes an extended vacation or is deployed overseas. Corporate Trustees are often used for this purpose.

Trusts are easy to manage (compared to probate). Do not be fooled—trusts are not "easy" to draft and set up, but compared to probate, well-drafted trusts are easy to administer. Since there is no one-size-fits-all plan, every trust should be tailored to that client's specific needs and estate planning objectives. Most states require no witnesses or other specific language to effectuate the living trust and/or an amendment to it. However, best practices dictate certain procedures that should be followed.

Trusts are good for "far-flung" assets. If a client owns real estate in more than one state, some form of probate will likely be required in each state. A trust avoids the necessity for a probate in all states.

HOW A LIVING TRUST WORKS. A living trust enables a client to control the distribution of their estate—just like a testamentary trust or Will. Unlike these other tools, a properly funded living trust completely avoids probate. When a client establishes a living trust, the lawyer usually transfers (or assists in the transfer) all of the client's assets to the trust. This process is called trust funding. Once the trust has been funded, then technically, the client no longer owns the assets individually. The assets are owned by the trust.

COMMON MISCONCEPTIONS. There are many things that people get wrong about the living trust, or don't understand correctly. These include:

My estate is not large enough to need a trust. The old school of thought was this: If an estate was not above the estate tax exemption amount (unified credit), then there was no reason for a trust. This is simply not true. A trust is still necessary for a number of reasons: It avoids probate; it provides more control and flexibility over the client's assets; and when used in conjunction with a durable power of attorney, it avoids a guardianship.

I will give up control of my assets. With a revocable living trust a client retains full control of their assets. The trust continues to use the client's social security number and does not file a separate tax return while the Trustor is alive.

Joint tenancy will protect me from probate. While is it true that on the death of the first joint tenant a probate does not occur, upon the second death or in the event of a common disaster, a probate will almost always be triggered. Also, when a client owes property jointly with a child, the client exposes that asset to the potential creditors of the joint-owner child. There may also be some tax consequences regarding the asset's carryover tax basis.

I will not have to probate because I have a Will. This is probably the most common misconception. A Will is simply a set of instructions to the probate court regarding how the client wants their property to be distributed. A Will does not avoid the probate process.

WHAT A LIVING TRUST WILL NOT DO. Living trusts are important estate planning tools. In recent years, many people have come to expect them to work wonders. But here's a list of miracles that trusts will not perform:

A trust does not make a Will unnecessary. Clients still need a simple Will to take care of the assets they fail to transfer to the trust or for assets that they acquire shortly before death. If they have minor children, the clients probably need a Will to appoint a guardian.

A trust does not affect operation of law transfers. Like a Will, a living trust does not control the disposition of jointly owned property, life insurance payable to a beneficiary, or other non-probate property. Operation of law transfers control, regardless of the terms of the trust.

A trust does not protect assets from creditors. During the Trustor's lifetime, creditors may attach to trust assets.

A trust will not protect assets absolutely from disgruntled heirs. While it is harder to challenge a living trust than a Will, a relative can still bring a lawsuit to challenge a living trust on the grounds of lack of mental capacity, undue influence, duress, or for other reasons.

A trust will not entirely eliminate delays. A living trust may lessen the time it takes to distribute assets after a client's death, but it will not completely eliminate all delays. The Trustee will still have to collect debts owed to the estate after the Trustor's death, prepare tax returns, and pay bills and distribute assets, just as a Personal Representative would. All of this takes time.

WILLS. When executing a trust, it is important to also execute a "pour over" Will. This is an essential component to a complete estate plan because it "pours over" any unknown or subsequently acquired assets from the probate estate into the trust. Traditionally a "pour over Will" is used as a precautionary measure when a trust is done. However, you should not rely on a Will to fund the trust. If you use a pour over Will to fund the trust, then the trust may then be public record, as it may be incorporated by reference and become part of the probate. This is especially true if the Will is contested. Additionally, the assets that are part of the probate will be public record.

If you have questions about revocable living trusts or any other estate planning tools and techniques, 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 video conference.

We represent injured people who have been hurt in auto-pedestrian collisions. If you or a loved one has been hurt, we can help!

When you're walking outside, you may take your safety for granted. Sidewalks, crosswalks, and crossing signals protect you from traffic. In truth, however, you always run a risk when you are walking near a roadway. Should you become involved in a collision with a vehicle, you are at substantial risk of serious injury or even death. If the unthinkable occurs and you are hurt in a collision—or a loved one is killed—contact a lawyer without delay.

As the miles Americans travel increases each year, so do pedestrian fatalities. According to the Governors Highway Safety Association, the number of U.S. pedestrian deaths climbed higher in 2019 than at any time during the previous 30 years.

WHO QUALIFIES AS A PEDESTRIAN? You do not have to be out for a walk to be considered a pedestrian. For the purposes of personal injury law, a pedestrian is an injury victim who was not in a motor vehicle at the time of a collision. As such, you qualify as a pedestrian if you were injured while:

* Changing a tire

* Cleaning the outside of the windshield

* Traveling on foot

* Riding in a wheelchair

WHO IS AT FAULT? Determining who is at fault in a collision is often difficult, but your lawyer has the knowledge and expertise to help. By law, drivers must show reasonable care in operating a vehicle. If they are negligent or willfully careless, they are likely to be liable for a collision that results. A negligent driver might:

* Be distracted by a passenger or a phone call

* Fail to notice a pedestrian “walk” signal

* Not see the crosswalk is occupied and stop

* Fail to signal a turn

* Miscalculate hazardous road or weather conditions

A willfully careless driver may:

* Text while driving

* Ignore crossing signals or school zone signs

* Choose to speed through an occupied crosswalk

* Choose to drive while impaired

CALCULATING DAMAGES. Determining the damages you are due as an injury victim is another gray area where a lawyer's advice is invaluable. A damage award should cover your current and future financial losses, including:

* Medical bills

* Loss of income

* Pain and suffering

* Ongoing physical or mental therapy

* Other foreseeable losses

We have been representing injured people and their survivors for more than 20 years. We understand the challenges you face and make sure you do not have to face them alone. Call us today at 253.858.5434 to set up a free initial consultation.

We can help with your small business's contract and collection methods to curtail rising accounts receivables caused by delinquent customers.

Often the most challenging part of operating a business is ensuring you get paid for your services. As a business chugs along month after month, it’s inevitable that a stack of past-due accounts receivables eventually grows. This is an unfortunate situation in which even the most business-savvy entrepreneurs find themselves with delinquent customers. Implementing a few best practices into your future customer dealings, agreements, and collection methods can help curtail rising receivables.

Here are some best practices in contract and collection methods which can help curtail rising accounts receivables caused by delinquent customers:

WRITTEN PLAN FOR ADDRESSING DELINQUENT ACCOUNTS. For starters, it is vital that your business implement a written plan for timely addressing delinquent accounts before they get out of hand. Every business should have a formal collection process in place to know the plan of attack on day one of the receivable and to have a consistent approach for all delinquent accounts. The goal should be that no past-due receivables are overlooked and ignored.

A collection policy need not be complicated or burdensome. In fact, the simpler the better. The point of the plan is to avoid procrastination on delinquent accounts and, therefore, to ensure action of some type is taken every so often. For example:

--10 days past due – phone call to debtor;

--20 days past due – follow up phone call to debtor;

--30 days past due – written demand letter to debtor;

--60 days past due – final notice demand letter to debtor;

--90 days past due – turn past-due account over to a lawyer.

IMPORTANT CUSTOMER INFORMATION FOR INCREASING COLLECTION SUCCESS. Once you have a formal written collection plan in place, the next step is to ensure your customer contracts and credit agreements contain the information you need to make it easier to collect the inevitable next delinquent account. When it comes to obtaining customer information, the more the better. This is where the old saying "An ounce of prevention is worth a pound of cure" comes to mind. Here is a non-exhaustive list of must-have customer information to request on your documents:

* Full legal name;

* Name of personal guarantor if customer is a business;

* Home address;

* Business address;

* Phone number(s);

* Email address(es);

* Banking institution with account numbers, branch name and location, and phone number;

* Trade references;

* Personal referrals;

* Disclosure of prior bankruptcy filings.

ADDITIONAL CONSIDERATIONS FOR YOUR CUSTOMER CONTRACTS. If possible based on your business, obtain a spouse’s signature on your contracts/agreements to include as an additional customer.

Don’t forget about the personal guarantee. If your customer is a corporation or other business entity you should have a personal guarantee section on your contract or credit agreement. The individual signing as the personal guarantor must sign in their individual capacity, not in their corporate capacity. Bottom line is that your business needs an individual that it can collect the debt from if the business entity goes out of business or has other financial difficulties.

Regarding interest and collection costs, you will want to ensure your contracts give your business the right to collect interest at the highest rate allowed by law. Your business should also consider including an attorney’s fees provision on its agreements. In Washington and Idaho, you are able to claim recovery of your collection costs and attorney’s fees so long as the underlying contract gives you the right to do so. But be aware that this type of provision works both ways. If you can claim prevailing party attorney’s fees from your customer, then your customer will be able to do the same against your business in the event the customer is the prevailing party. The reality is that for many businesses, without the ability to recover collection costs and attorney’s fees some debts just won’t be worth pursuing, which hurts the bottom line over time.

If you're a small business owner and need help collecting on some of your delinquent accounts receivables, give us a call at 253.858.5434 to see how we can help.

Using a Small Estate Affidavit to Transfer Assets in Estates with Less Than $100,000 in Probate Assets

Washington law permits the use of a small estate affidavit in certain circumstances. Before using a small estate affidavit, you should first ask whether the deceased person had less than $100,000 in probate assets. If they did, you can probably use this process. However, you should also ask whether they owned any real estate. If the answer is “yes,” then using a small estate affidavit may not be the best choice. While a small estate affidavit may be used for a decedent who had real property, the affidavit cannot be used to transfer title to the real property. Furthermore, the equity in the real property is used toward the $100,000 calculation. Therefore, it is rare when you could or would want to use the small estate affidavit process if your loved one died with real property. In those cases, you'll probably need a probate.

If you decide to use the small estate affidavit and present it to a person or financial institution that is holding the assets of your loved one, that person or financial institution is supposed to deliver the asset to you. The person or financial institution that held the asset will be discharged and released from any liability in the same way as if it had been dealing directly with the Personal Representative of an estate. The holder of the asset has no obligation to inquire into the truth of the material in the affidavit, however, they cannot ignore facts known to be untrue.

Even if the estate meets the financial threshold, however, other requirements need to be satisfied:

* You must be a “successor,” as that term is defined in the small estate affidavit statute. You are a successor if you are entitled to the asset in question under the Will of the decedent or under Washington’s law of intestate succession (RCW 11.04.015) if there was no Will. If you are a surviving spouse, you are also a successor at least to the extent of your community property portion of the asset being held.

* Your loved one must also have been a resident of the State of Washington at the date of death.

* No application or petition for the appointment of a Personal Representative or estate administrator is pending or has been granted in any jurisdiction.

* All debts of the decedent including funeral and burial expenses have been paid or provided for.

* You have given advance notice to all other “successors” of your intention to obtain the asset of the loved one and they have provided you written authorization to do so.

If you can satisfy all of these elements, you can submit a small estate affidavit to a person or financial institution holding your loved one’s assets. But there are a couple things to remember:

First, you must wait at least 40 days after your loved one has died before submitting the affidavit.

Second, you are required to mail a copy of the affidavit, along with the decedent’s Social Security Number, to the Washington State Dept. of Social and Health Services' Office of Financial Recovery, whose address is currently: P.O. Box 9501, Olympia, WA 98507-9501.

Even when all of the statutory requirements are met, the small estate affidavit process might be impossible or impractical to use. If you are not entitled to all of the assets, you must get written authorization from others who also have a right to the property. This may be impossible when another heir is uncooperative. Even with such authority, the family relationships may be so bitter that you should consider first whether you are willing to take the risk of acquiring the particular asset and then being answerable to the heirs for dividing it appropriately. You will likely need to pay bills before dividing it. Your disgruntled family members might accuse you of stealing some of the assets. Whether you have a cooperative family or not, you should keep good records of the assets you have received and bills you have paid. If the family relationship is too acrimonious, you should consider conducting a probate that will provide a more formal structure. Hiring a lawyer in this situation can avoid a lot of headaches and sleepless nights.

If you have questions about small estate affidavits or other aspects of the probate process, give us a call at 253.858.5434 to set up an appointment today.

When your business is a partnership, your partnership agreement governs its operations. We can help you prepare an agreement that establishes the terms of your partnership and roles of the partners.

Partnerships remain one of the most straightforward and easiest business structures available to partners who want to own property together or work together to make their business a success. Partnerships require minimal paperwork and bureaucracy, and they rarely require public filings. Still, formation is an important step for partnerships, just like it would be for any business. This cannot be done without a well-drafted partnership agreement. If you are looking to start your own partnership, we can help you draft the best possible partnership agreement for your needs. We can help you decide whether a limited liability partnership, a limited partnership, or a general partnership is right for your needs and help you draft the necessary documentation quickly.

When you start a business as a partnership, a partnership agreement governs its operations. A partnership agreement is simply a legal document that that establishes the terms of the partnership, as well as the roles and responsibilities of the partners. Partnership agreements serve as the governing documents of any partnership and they establish the rights and responsibilities of each partner, as well as the rules on how the business should be run on a daily basis or in the event of a business crisis, such as the death of a partner or dissolution of the partnership.

TYPES OF AGREEMENTS. While most partnership agreements will be fairly similar and should require the same types of clauses and provisions, there will be some variation depending on the type of partnership. There are three basic types of partnerships available to small businesses in most states in the U.S.:

(1) General Partnership. General partnerships make up the majority of partnerships in the U.S., as they are the simplest type of partnership available. In general partnerships, each partner is involved in the day-to-day management of the business and shares in the unlimited liability agreed to under this structure.

(2) Limited Partnership. Like a general partnership, general partners in limited partnerships run the business and take on unlimited liability. Unlike general partnerships, however, limited partnerships can have “silent” limited partners who are not involved in the operations of the business and have liability limited to the amount of their investment.

(3) Limited Liability Partnership (LLP). Limited liability partnerships are only available in some states, and most states restrict these types of partnerships to certain types of undertakings. LLPs operate like general partnerships, but all partners have limited liability.

Each type of partnership has its own advantages and disadvantages, and every partnership agreement will have very different needs, so it will help to discuss your options with a lawyer.

THE UNIFORM PARTNERSHIP ACT. Not all partnerships operate under partnership agreements. Some simply operate under a verbal agreement. These partnerships are governed by state law and the Uniform Partnership Act (in Washington, it's RCW Chap. 25.05; in Idaho it's I.C. Chap. 30-23). The Uniform Partnership Act defines defaults applied by the states to operations and disputes involving partnerships. While strictly speaking there is nothing wrong with operating according to the Uniform Partnership Act alone, conducting business without the protection of a partnership agreement often leads to unexpected, even costly, outcomes for businesses. It is always best to ensure that you have full control over how your business operates by using a partnership agreement.

KEY PROVISIONS TO INCLUDE IN PARTNERSHIP AGREEMENTS. Although every partnership agreement will differ slightly, all partnership agreements must address certain issues through the following key terms and provisions.

(1) Name. Any partnership agreement must name the business and in some cases must be accompanied by a request to file a “Doing Business As” or fictitious name.

(2) Ownership Percentages. All ownership allocation must be clearly defined.

(3) Capital Contributions. It is important to not only establish what contributions are expected of each party when starting the business, but also who will be obligated to contribute further capital at later stages and under which circumstances.

(4) Profit and Loss Allocations. While most profits and losses are allocated according to ownership percentage, this is not always true, especially if one partner does more in terms of management and is not given a salary. All profits and losses must be clearly attributed.

(5) Distributions. These provisions clearly establish when profits of the business can be distributed to the partners, and which partners, if any, earn a salary.

(6) Partner Authority. Unless otherwise stipulated, all partners have equal and unlimited authority to commit the business as they see fit. This power can be limited in this clause or require joint authority for large decisions.

(7) Management. This section generally assigns major management duties of the partners, especially vital procedures such as accounting.

(8) New Partners. This clause details the procedure to add new partners.

(9) Death/ Disability. This clause defines what happens to the partnership after a partner dies or is incapacitated, and, in the case that the partnership continues to exist, defines the authority of the beneficiaries of the partner who left.

(10) Dissolution. This clause defines situations under which the business will be dissolved, as well as exit strategies for any single partner who wishes to leave.

(11) Dispute Resolution. Even the best partnerships sometimes experience disputes. This clause explains the procedures for resolving such conflicts.

If you are considering forming a partnership, either to own property or to start a business with someone else, give us a call at 253.858.5434 to find out how we can help. 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 equipment.

If you have a disabled loved one, an ABLE account is a planning tool that offers a person with disabilities a tax-free savings option that doesn't interfere with other benefits.

In July 2018, Washington launched its Achieving a Better Life Experience (ABLE) program (RCW 43.330.460, et seq.). For those of our clients with disabled family members or loved ones, an ABLE account is a planning tool that offers a person with disabilities a tax-free savings option (similar to a 529 College Savings Plan) that does not interfere with their eligibility for means-tested government benefits, such as Supplemental Security Income (SSI) and Medicaid. Special needs trusts (SNTs) are well-established savings tools that also protect eligibility for public programs.

Since the regulations governing SNTs and ABLE accounts are quite different, people with disabilities and their families should consider their specific circumstances before establishing one or the other. In some instances, it may be beneficial to create both.

ELIGIBILITY. The ABLE Act limits eligibility to an individual whose disability onset occurred prior to the age of 26 and who satisfies Social Security’s criteria regarding significant functional limitations stemming from the disabling condition.

First party SNTs, which are funded with assets belonging to the beneficiary, must be established before a person meeting Social Security’s disability criteria reaches the age of 65. There are no age limits for creating third-party trusts, funded with assets belonging to anyone other than the beneficiary.

ESTABLISHMENT AND MANAGEMENT. ABLE accounts can be created and managed by the beneficiary, subject to capacity. If they need assistance, the account can be established and/or managed by their parents, conservator/guardian or agent under a power of attorney.

A first party SNT may be established by the beneficiary, their parents, grandparents, conservator/guardian or the court. A third-party SNT may be established by anyone except the beneficiary. Management of SNTs is handled by a designated trustee.

CONTRIBUTION LIMITS. There are no limits to how many SNTs an individual may have or to how much each trust may hold. On the other hand, an individual may have only one ABLE account, and total annual contributions are limited to the annual federal gift tax exclusion ($15,000 for 2021).

Any amount over $100,000 in an ABLE account counts towards the individual’s $2,000 resource limit for SSI and Medicaid eligibility, and causes the individual’s SSI payments to be suspended until the account balance decreases to less than $100,000. If all other eligibility rules are followed, the individual’s SSI payments will resume when the account balance drops below $100,000 without the need to reapply for SSI. During the SSI suspension period, the individual’s SSI-linked eligibility for Medicaid continues uninterrupted.

Total lifetime contributions to an ABLE account are tied to the state’s limit on total contributions to its 529 College Savings Plan. Here in Washington, that limit is $500,000. In light of the annual contribution limit of $15,000, these lifetime limits would not be reached for decades, even if no disbursements are made from the ABLE account during the accumulation period.

INVESTMENT OPTIONS. Each state’s ABLE program designates investment options available to account holders. Changes may be made no more than twice annually. SNT investments are made at the sole discretion of the appointed trustee, who has a fiduciary responsibility to act in the beneficiary’s best interests.

USE OF FUNDS. An SNT, at the trustee’s discretion, may pay for anything that benefits the beneficiary alone─ other than food and housing─ without affecting government benefits. If the beneficiary is an SSI recipient, food and housing expenditures are considered in-kind support (ISM) and will reduce payments from that program.

An ABLE account may pay for the beneficiary’s “qualified disability expenses” (QDEs) to maintain or improve the health, independence, or quality of life of the beneficiary. This includes basic living expenses, education, housing, transportation, employment training and support, assistive technology, personal support services, health care expenses, financial management and administrative services. The ability to pay for housing without affecting SSI is an attractive benefit of ABLE accounts. More categories may be added by further regulations.

If withdrawals are made for expenditures other than QDEs, the earnings portion of the withdrawal would be subject to regular income tax and a 10% penalty.

FEES. ABLE account fees are nominal, generally limited to maintenance and charges by financial institutions. Attorney and trustee fees are incurred when creating and maintaining an SNT. A less expensive alternative─a pooled SNT─may be appropriate in some cases. Pooled SNTs are administered by nonprofit organizations and combine the resources of many sub-accounts for efficiency and investment effectiveness.

TAXES. Many believe that the most beneficial provision of an ABLE account is that it grows “income tax-free,” at least for federal income tax purposes. However, few who receive public benefits actually pay any income tax anyway. Even the ability to avoid all taxes on a $100,000 investment within an ABLE account is unlikely to improve the tax picture for a person who is eligible for SSI or Medicaid.

Contributions to an ABLE account are not deductible under federal income tax rules. A transfer to an ABLE account by a third party does qualify as a present interest gift for purposes of the federal annual gift tax exclusion. The modest tax benefits associated with an ABLE account may merit a professional review of the beneficiary’s particular person's tax situation to determine whether those tax considerations could make an ABLE account a worthwhile option.

First-party SNTs are generally treated as grantor trusts, with income taxable to the beneficiary. Often the income generated will be below taxable limits. With proper drafting, third-party SNTs can use various planning strategies to minimize taxes.

MEDICAID PAYBACK. State Medicaid programs that provide medical assistance and/or “waiver” services for the benefit of the beneficiary of an ABLE account (including community-based residential services) may assert a “payback” claim for reimbursement upon the beneficiary’s death payable from funds then remaining in the account. All funds contributed to an ABLE account, including donations from third parties, are subject to this Medicaid payback if a state elects to assert the reimbursement claim.

Subject to the payment of any outstanding QDEs, a state must limit its payback claim to Medicaid expenditures for the benefit of the beneficiary which occurred after the creation of the ABLE account. Although unlikely, it is theoretically possible that a state may elect not to seek any payback recovery from ABLE accounts belonging to its own citizens (not to participants from other states), and this beneficial feature, if available, may certainly influence a beneficiary’s choice when considering which ABLE program to select.

Funds remaining in a first-party SNT are subject to Medicaid payback for services performed throughout the beneficiary’s life. There is no payback required from third-party SNTs.

WHICH TO CHOOSE? When considerign the establishment of an SNT and/or ABLE account, the beneficiary or their legal representative should consult an experienced lawyer about the suitability of these savings tools for the beneficiary’s needs. An ABLE account is not an ideal vehicle to manage significant third-party funds due to the likelihood of a Medicaid payback claim upon the death of the beneficiary, unless there is also the strong likelihood that all third-party funds contributed will in fact be spent before the beneficiary dies. For most people with disabilities, an ABLE account is not a substitute for comprehensive SNT planning, but it may be a helpful secondary tool to help secure their financial futures.

There are several circumstances in which an ABLE account may be particularly useful. For example, an ABLE account would allow someone with disabilities to save unspent work earnings or Social Security benefits for a future purchase without violating the general rule that the recipient of SSI and Medicaid cannot accumulate more than $2,000. An ABLE account might also be useful where a relative has misguidedly left a small inheritance (i.e., less than $15,000) directly to a person who receives Medicaid and/or SSI (instead of designating the bequest to be paid to a third-party SNT). As discussed above, an ABLE account may also be used to avoid a reduction to the beneficiary’s SSI payment if contributions are used to provide for the beneficiary’s housing expenses. Finally, an ABLE account might be an excellent vehicle to hold a small litigation settlement or an unexpected windfall such as lottery winnings.

A lawyer experienced in creating special needs trusts can discuss in detail how these two techniques interact. A carefully drafted SNT might well authorize the trustee to transfer money into the beneficiary’s ABLE account to maximize the benefits of both tools simultaneously. If you have questions about ABLE accounts or special needs trusts, give us a call at 253.858.5434 to set up an appointment today.

What is a Codicil and how do they work?

A Codicil is a document that’s added to an existing, signed Will, to change it or add new provisions to it. The word "codicil" has been around since the 1400s, but now that most Wills are created electronically, it's often easier—and clearer—just to make a new Will.

Both Wills and Codicils require the signatures of witnesses. Wills, unlike most other legal documents, aren’t valid unless they are signed in front of two adult witnesses. The witnesses aren’t there just to make sure you’re who you say you are. They sign their own statement at the end of your Will, declaring that you seemed of sound mind and not under undue influence—in other words, that it looked to them like you understood what you were signing and were acting of your own free will.

This witness requirement for Wills isn’t likely to go away anytime soon. Wills are simply different from other documents because if there’s a dispute over one, the key person—the one who signed it—won’t be around to explain what they meant. By contrast, if people are arguing about, say, a contract, both of them can go into court and do their best to convince a judge or jury of their point of view.

A few states are chipping away at the witness requirement, by allowing people to sign in front of a notary public instead of witnesses, but it’s definitely the exception to the rule. After all, a notary public checks your driver’s license and verifies your identity, but isn’t asked to form any opinion about your mental state.

How does this affect Codicils? Because they are just like Wills, witnesses are required for them, too. So if, after you make and sign your Will, you want to add a new paragraph with a Codicil, you’ll have to sign the Codicil in front of two witnesses, just like the original Will.

Making a new Will is often as easy as making a Codicil. Most of us will eventually want to change the first Will we make. After all, circumstances change: we marry, divorce, have children, have fights with relatives, take up and abandon charitable causes. One “Last Will and Testament” isn’t likely to carry us through to the end.

The witness requirement for the Codicil, plus the ease of using computers to prepare, modify, and print documents, erases most reasons to make a Codicil. When legal documents were painstakingly written out with quill pens, it made sense not to rewrite a whole Will if you could just tack on a brief Codicil. But these days, there’s no advantage to a Codicil.

There is, however, a drawback: A Codicil is unlikely to seamlessly fit with the original Will. Is it a pure addition, or does it negate something in the original document? If it’s supposed to replace part of the first Will, which part?

The solution is simple: Just make another Will. These days, it's easy to start from scratch. If you're ready to make a Will and other estate planning documents, 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 conference.

People with young families have special estate planning considerations. Don't postpone preparing an estate plan until you're older. We can help!

People with young families have special considerations. They often need to take specific and direct steps to protect their spouse and children. While many individuals postpone estate planning until they are older, doing so can lead to disastrous consequences.

NOMINATING A GUARDIAN. One important consideration is to nominate a guardian for minor children. A guardian is the person who will take over raising a child should something tragic happen to the parents. They are appointed by the court. This nomination is usually part of a Will. Obviously, the surviving parent will continue to raise the children. However, it is important to nominate a guardian in case something happens to both parents. A lot of consideration has to go into nominating a guardian. This person should be someone you trust. This individual will have legal authority to make decisions about the kids, such as what type of medical treatment they receive, where they go to school, and where they live. If a guardian is not named, the court has to appointment someone without the benefit of knowing the parents' preferences.

CREATION OF TRUSTS. Minors cannot directly inherit property. As such, many young couples create Trusts that direct how assets will be used for the benefit of their minor children. Another important consideration is appointing a Trustee. Some people choose someone who is particularly good at handling money or who the parent believes will follow the instructions of the Trust. If a person is not specifically named to manage your children’s inheritance, the court may have to appoint someone to complete this task. This may be a professional fiduciary, which can cost a lot and take from the inheritance the child is entitled to receive. It also involves a lot more time and effort - there are lawyers, judges, reports, accountings, etc. involved. If written instructions are not provided, the full inheritance may be given to the child when they turn 18, an age that many parents believe is not old enough to prudently manage an inheritance.

PURCHASING LIFE INSURANCE. The primary reason to have life insurance is to provide financial support to dependents. Life insurance can replace the earnings for a number of years while the kids are still minors. Having life insurance allows the surviving spouse to have access to cash they need to support the family. Single parents may need to consider a person they trust to manage funds for minor children or name the Trust as the beneficiary of a life insurance policy. The person making the estate plan may want to consider how many years it will be until their children will not need any support and multiply this by their earnings to determine the amount of life insurance is necessary. They may need to take into consideration other factors, such as whether additional services would be needed if there is only one parent involved.

PREPARING FOR DISABILITY. Part of an effective estate plan considers what will happen in case you become incapacitated. You may want to establish an advance medical directive. This is a document that sets out a person’s wishes for end-of-life decisions. For example, a person can decide whether or not they want life support if they have a terminal condition or is permanently unconscious.

Another piece of an effective estate plan is to draft a power of attorney for health care. This is a document that gives one person the legal ability to make medical decisions for another person. The person holding the power of attorney should consider the wishes of the person and any instructions included in their advance directive when making these decisions.

Another important estate planning document is a durable power of attorney for finances. In this document, you name an agent to handle financial transactions and make financial decisions for you if you become unable to do so yourself, either because of age, illness, or injury.

It is important to establish these documents while you're healthy. If you lack legal capacity, you cannot create a valid document. A court order may be the only way to trigger decisions, which is often time-consuming and expensive.

Call us at 253.858.5434 for legal advice and representation regarding your estate plan. We can explain various estate planning documents and make recommendations about the types of documents that should be put in place. 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.

The American Rescue Plan: Stimulus Checks, the Restaurant Revitalization Fund, and Other Provisions

Last week, President Biden signed into law a $1.9 trillion COVID-19 relief bill known as the American Rescue Plan which intends to provide substantial financial assistance to individuals and small businesses. With a relief package of this magnitude, there are a large number of financial aid provisions. Two of the most notable include the $1,400 stimulus checks for Americans and specific relief for restaurants.

STIMULUS CHECKS. The American Rescue Plan included a third round of relief to individuals in the form of $1,400 stimulus checks being paid to Americans with adjusted gross incomes up to $75,000 for individuals and $150,000 for married couples filing jointly. Similar to the prior stimulus checks, the payments are reduced for those above these limits and fully phase out for individuals making $80,000 and $160,000 for married couples filing jointly.

RESTAURANT REVITALIZATION FUND. Restaurants that have been drastically and disproportionately impacted by the COVID-19 pandemic have been asking for relief and now they have it. The American Rescue Plan includes a $28.6 billion “Restaurant Revitalization Fund” (RRF) that provides tax-free federal grants to eligible businesses through the Small Business Administration. Of the total grants available under the RRF, $5 billion has been allocated to businesses with gross receipts of $500,000 or less during 2019 and the remaining $23.6 billion will be available for the SBA to award to businesses equitably based on annual gross receipts.

WHO IS ELIGIBLE? Restaurants and similar businesses with the primary purpose of serving food or drink such as food stands/trucks/carts, bars or taverns, taprooms, brewpubs, and tasting rooms that are not publicly-traded and own or operate 20 or fewer locations (including affiliated businesses) as of March 13, 2020 are eligible. Entities applying for grants must submit a good faith certification that (1) the uncertainty of current economic conditions makes necessary the grant request to support the ongoing operations and (2) the entity has not applied for or received a grant under the “Shuttered Venue Operators” grant.

WHAT IS THE GRANT AMOUNT? The SBA will award the tax-free federal grants based on an entity’s pandemic-related revenue loss and reduced for any amounts already received through the Paycheck Protection Program (PPP).

RRF Grant = 2019 revenue – 2020 revenue – PPP loans

If the business was not in operation for all of 2019, the grant is equal to the difference between the annualized average monthly revenue for 2019 compared to the annualized average monthly revenue for 2020. Eligible businesses that were not in operation until 2020, can receive a grant equal to the amount of eligible expenses less 2020 revenue. For businesses that are not yet in operation as of the application date, but have eligible expenses, the grant would be equal to the eligible expenses.

The maximum grant amount for an eligible business and related affiliates is $10 million and limited to $5 million per physical location of the business. Further, the SBA is able to adjust awards based on demand and relative local costs in the market where the business operates.

WHAT ARE ELIGIBLE EXPENSES? Eligible expenses include payroll, principal and interest on mortgage obligations, rent, utilities, maintenance (including construction to accommodate outdoor dining), supplies for protective equipment and cleaning materials, normal food and beverage inventory, operational expenses, paid sick leave not covered under other federal programs and any other expenses the SBA determines to be essential to maintaining operations.

For businesses, supporting restaurants is now 100% tax deductible through the end of 2022, instead of the prior 50% limitation.

OTHER PROVISIONS. Additional provisions in the American Rescue Plan include:

* An additional $7.25 billion for the Paycheck Protection Program.

* Extension of the Employee Retention Tax Credit (ERC) through December 31, 2021.

* Extension of family and sick leave credits under the Families first Coronavirus Response Act (FFCRA).

* Extension of the Work Opportunity Tax Credit

* $15 billion to the Economic Injury Disaster Loan (EIDL) grant program

* $1.25 billion for the SBA’s Shuttered Venue Operators Grant Program

* Expanded child tax credit

For more information or assistance, please give us a call at 253.858.5434. We are here to help!

For the innocent victims of drunk drivers, these upsetting and life-threatening incidents often have serious ramifications and can leave you with many questions. We can help.

Drunk driving collisions can be life-altering events for innocent individuals who, through no fault of their own, are injured (or worse) by an impaired driver. Perpetrators of these crashes are considered "under the influence" when they drive with a blood alcohol level that meets or exceeds the legal limit of .08 percent. There is no question that drunk driving offenders should be held legally accountable for their actions and the damages they cause.

For the innocent victims of drunk drivers, these upsetting and life-threatening incidents often have serious ramifications and can leave you with many questions. So, what is the best course of action for you to take? How can your interests be best served? To whom do you turn? Seeking legal advice from a lawyer is crucial to ensure you get answers to your questions and the maximum compensation you deserve.

If you or a loved one was hurt or killed by the negligence of a drunk driver, you may be entitled to compensation, and we're here to help. We will protect your rights and take the steps necessary to best represent your interests. In these situations, we will take a number of actions on your behalf. Some of these include:

* Making sure the collision is fully investigated and documented;

* Determining if the drunk driver was driving a commercial vehicles; * Contacting the at-fault driver's insurance company;

* Gatherin evidence; and

* Determining if the driver had been over-served at a bar or restaurant.

DRUNK DRIVING STATISTICS. The statistics regarding drunk drivers are more than alarming. The National Highway Traffic Safety Administration reveals that two out of three individuals will become involved in a drunk driving collision sometime during their lives and about every two minutes someone is physically harmed as a result of a drunk driving incident. Additionally, each day in the U.S., 27 people die because of crashes caused by drunk drivers.

If you were the victim of an impaired driver, call us today at 253.858.5434 for a free consultation. You will pay nothing unless we can settle or win your case.

If you've been named Personal Representative of a loved one's estate, you will need to prepare a formal estate inventory. Here's what you'll need.

If you've been named the Personal Representative of a loved one's estate, you will need to thoroughly understand the scope of the decedent’s assets and debts so that you can prepare for the distribution of assets. You will need to estimate the value of each asset and determine the way in which the asset is owned, which will affect the process of transferring it. Even if you have a general sense of the assets involved in an estate, you should take the time to investigate whether there may be additional assets of which you are unaware. You can look in safe deposit boxes or likely hiding places in the decedent’s home, consult their friends and family members, and review key documents in the decedent’s financial papers, such as bank statements, tax returns, and investment records. In some cases, there may even be assets of which the decedent was unaware.

Probate requires preparing a formal inventory, although in Washington it is no longer required to be filed with the court. You should also maintain a worksheet that lists assets for your own reference, even assets that do not need to go through probate.

REAL ESTATE, BANK ACCOUNTS, AND VEHICLES. With regard to real estate owned by the decedent, you will want to provide the address and a description of the property. For bank accounts, you will want to list the relevant bank holding the account, as well as the account number and the amount in the account at the time of the decedent’s death. You can send you Letters Testamentary (if the decedent left a Will) or your Letters of Administration (if there's no Will) to the bank to prove that you are entitled to this information. If the decedent owned any vehicles, including cars, motorcycles, boats, and planes, you should list the make, model, and year of the vehicle as well as its identification number.

STOCKS AND BONDS. Many people leave substantial amounts of stocks and bonds to their loved ones. Your inventory should include the number of shares of each type of stock, the name of the corporation, and the name of the exchange on which the stock is traded. Meanwhile, you should note the total gross amount of a bond, the name of the entity that issued it, the interest rate on the bond, and its maturity date. (You also will want to note the serial number on U.S. savings bonds.)

LIFE INSURANCE AND RETIREMENT PLANS. For life insurance policies, you will want to record the company providing the policy, the policy number, the policyholder’s name, the type of coverage provided, and the primary and any alternate beneficiaries. You should record the amount in any retirement plan, as well as the account number and the company responsible for managing the account.

WAGES AND BUSINESS INTERESTS. You should estimate any unpaid wages, commissions, and other benefits of employment that the decedent may have been owed from their employer. If they owned a business, you will want to note the name of the business and the type of form that it took, such as a partnership, an LLC, a corporation, or a sole proprietorship. For businesses operated with others, you will want to find more information about the ownership structure. If the decedent invested in a limited partnership, you should get a statement from the partnership on the value of the decedent’s investment.

INTELLECTUAL PROPERTY. A decedent may have had intangible assets, such as a patent on an invention or a copyright on a book. You should make note of any patents, copyright registrations, or contracts with businesses regarding intellectual property.

DEBTS AND JUDGMENTS. If the decedent loaned money to someone else or won a judgment in court, their estate has the right to collect repayment on the loan or the proceeds of the judgment. You should keep track of any promissory notes or court documents indicating a verdict or settlement in the decedent’s favor.

If you need representation or legal advice about administering an estate or your duties as Personal Representative, give us a call at 253.858.5434 to set up an appointment today.

Do you have a kid going off to college? They're going to need certain important documents, like a financial power of attorney, a health care power of attorney, and a HIPAA release, among others.

Do you have a kid going off to college for the first time or already living away at school? They’re going to need certain important documents—like a health care power of attorney and a HIPAA release, among others—in place. These key documents will let you as the parent get info about them in the event of a medical emergency.

For each of these legal documents, parents should keep the original and the student should have copies. It may be a good idea for a roommate or fellow student to know where the copies are. In addition, the family may want to see if a copy can be filed at the school with student medical records. Keep in mind that all of these forms should be updated each year and that you’ll need one form in your state of residence and a separate one in your child’s state of residence if they’re attending an out-of-state school.

1. HIPAA Release. Ever tried to get an update about a loved one in the hospital over the phone when there’s been a sudden onset of a medical issue? If so, you know it can be difficult, if not impossible, to get the info you need if you’re not authorized. That’s because of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

What you need to cut through the red tape is a HIPAA release. This document lets a patient (your college student) designate certain family members, friends, and others who can be updated about their medical info during treatment. Obviously, your kid should fill this out before they need it during a medical emergency.

The HIPAA form becomes extremely important if your child is living away at school and gets involved in an accident. That’s because you’re not getting any info over the phone even though you’re their parent—unless you fill out this form.

2. Health Care Power of Attorney. A health care power of attorney is a document naming you the parent as an “agent” for your college student. If your child becomes medically incapacitated, you can make informed medical decisions on their behalf. This document can name you as the sole point of contact and decision-maker. That will allow you to decide the best course of action with the doctors.

3. General Durable Power of Attorney. A medical power of attorney is strictly for health care choices should your child become incapacitated. A general durable power of attorney, however, covers financial decisions. This document allows a college student to give authority to another person (the parents) to make financial/legal decisions. It also allows the parents to make the following financial transactions on the student’s behalf:

* Managing bank accounts

* Paying bills

* Filing taxes

* Applying for government benefits

College is a time of great change for both parents and their kids. Young adults are dealing with being on their own for the first time. And parents may be dealing with empty nest syndrome. If you have questions about legal documents for your child in college, 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 conference.

We've been doing estate planning since 1996. When it comes to estate planning, we will simplify complex concepts and guide you through what can be both a technical and an emotional process.

We have been practicing in the area of estate planning, Wills, Trusts, and probate since 1996. It is our educational approach that distinguishes us from other law firms. We’re able to simplify complex concepts and patiently guide you through what can be both a technical and an emotional process.

Individuals and families trust us with their estate planning needs. We help develop core estate planning documents, such as a Will, Durable Power of Attorney, Health Care Power of Attorney, and Directive to Physicians (commonly called a "Living Will"). In addition, we can assist with integrating other issues into your overall estate plan, such as the sale of a business, charitable giving, lifetime gifting, prenuptial or post-nuptial agreements, or long-term care.

We also assist individuals and professionals serving as Personal Representatives (what used to be called "Executors") and Trustees with the probate process and the administration of various types of Trusts. We help with the filing of court documents, gathering and valuing of assets, and compliance with fiduciary duties. If disputes arise, we provide a range of trust and estate dispute resolution options.

We begin working with you by first getting acquainted. We ask basic questions to determine your specific needs and the best way for us to assist you. Whatever your needs may be, together we prioritize and develop a comprehensive plan tailored for your unique situation. We also strive to give you options. We will match the appropriate vehicle or strategy to your objectives. For each planning technique or each step of an administration, we offer an explanation of benefits and drawbacks, educating you about the law and compliance requirements. We help you compare and contrast the options so you clearly understand the intended outcome.

If you, your friends, or family members have estate planning and we can assist you, 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 conference.

What is probate? If you're not a lawyer and don't understand what probate is, don't feel bad. A lot of lawyers don't know either.

What is probate? If you’re not a lawyer and don’t understand what probate is, don’t feel bad. A lot of lawyers don’t know either. Unless you practice in the area regularly, there is little need for you to know much about it. Here is how we describe probate to clients: It is a legal process by which a person is appointed by the court to sell or transfer a deceased person's assets, pay all of the bills, manage tax issues, distribute the remaining assets according to the person's Will, and then properly close the probate. If there is no Will, you distribute the assets according to Washington's default law on distribution to heirs. Seems simple, right? Kind of, but in return for that simplicity, the person who is appointed needs to carefully follow the law, including sending out the appropriate notices to the other people interested in the estate so they can defend their rights if needed. Washington courts do not normally directly supervise the administrator of the estate. The Personal Representative (what used to be called the "Executor") is on their own. But failing to follow the rules can get you in trouble and can sometimes be costly.

MYTH #1: IF I DON'T HAVE A WILL, THE STATE WILL GET EVERYTHING. We hear this more frequently than you'd think. Many people think that if there is no Will, then "the state will get everything." Not true. When a person dies with no Will, their estate is distributed to the person's "heirs" as defined by state law. In Washington, the "heirs" are who you'd expect: the surviving spouse, children, grandchildren, great-grandchildren and further descendants, parents, siblings, siblings' descendants (nieces and nephews), grandparents, grandparents' descendants (aunts, uncles, then cousins), etc., in that order. RCW 11.04.015. Furthermore, taxation issues are the same regardless of whether or not the decedent left a Will. The administration of the estate is also similar with or without a Will. Getting a person appointed, however, can be slightly more complicated.

MYTH #2: IF I HAVE A WILL, I DON'T NEED A PROBATE. Whether you need a probate has nothing to do with whether there is a Will. The need for a probate is dependent on many other factors that are best assessed by a lawyer who practices probate law. But generally, a probate is needed when you have assets that can only be obtained by a person with Letters Testamentary (which you can only get by opening a probate) and who has taken on the responsibility of conducting the probate properly.

HOW LONG DOES PROBATE TAKE? There is no set time period that a probate must remain open. It is a matter of how long it takes to marshal the decedent’s assets, get their name off of titles to property, sell assets, pay all creditors, and take care of taxes. This need not take a long time. When there is a house, it might take a while to sell the house. Also, if a Notice to Creditors is published, you’ll need to wait to finish the probate until the 4-month claim period has expired. But other than that 4-month claim period, nothing is driving the length of the probate except for how long it takes you to liquidate and distribute all of the decedent's assets and pay their bills.

If you've been named as Personal Representative of a loved one's estate and have questions about how the process works, give us a call at 253.858.5434 to set up an appointment today.