We assist clients in creating plans for the disposition of their estate after death and for the perpetuation of family businesses.

We assist clients in creating plans for the disposition of their estates after death and for the perpetuation of family businesses. This involves the laws of Wills, Trusts, probate, real estate, marriage, and state and federal taxation. We prepare documents that preserve as much flexibility as possible and provide opportunity for later tax planning. This is important given the frequent changes to the tax laws we often experience. When you need an estate planning lawyer, we have the knowledge and experience to address all of your needs. In addition to Wills and Revocable Living Trusts, we prepare documents such as Irrevocable Life Insurance Trusts (ILITs), Qualified Personal Residence Trusts (QPRTs), Qualified Domestic Trusts (QDOTs), and Charitable Remainder Trusts to carry out lifetime estate planning objectives and reduce or eliminate federal and state estate taxes. Optimal tax planning may also involve the rearrangement of ownership of property within a family unit, by gift or otherwise. It may also involve planning for multiple generations.

Having well-crafted, properly executed estate planning documents in place can ensure that your wishes will be followed and may also prevent a contest between your heirs. Such contests are not uncommon, especially if the Will or other documents are not properly signed and witnessed. We can help you decide how your Will or Trust should direct distribution of your property in light of the size of your estate and the age and well-being of your spouse, children, grandchildren, or other heirs. The distribution may involve setting up Trusts in your Will, structuring the timing of distributions to your heirs, and taking steps to mitigate estate taxes. We can also help you identify who should be in charge of your estate and who might act as guardian of your minor children, if necessary, on your death. Having an estate plan can protect your estate and prevent unnecessary expenditures at the time of death. Contact us at 253.858.5434 to have your estate plan prepared and be confident that your wishes will be honored upon your death.

The death of a family member or loved one is stressful, to say the least. The legal issues around death can be complex. We can help with your Will and settling an estate.

The Holmes-Rahe Stress Inventory rates various life events for stress. Not surprisingly, the death of a spouse is the top item and death of close family is in the top five too. It’s not surprising then that it’s at a time like this that Personal Representatives and families turn to lawyers to help them. The legal issues around death can be complex. A lawyer can help you with your Will and with settling an estate.

WHAT IS PROBATE AND HOW CAN A LAWYER HELP? Probate is the process by which estates get settled after someone dies. It’s a court process so it can be complicated and involve legal terminology. It’s important for anybody writing a Will, for any beneficiary of a Will, and for anybody named as Personal Representative of an estate that it is handled properly. Using their knowledge of estate law, a lawyer can help the process of administering an estate after someone has died. They ensure that the decedent's instructions are followed and their heirs receive any inheritance with minimum stress.

1. DRAFTING A WILL. There are DIY Will writing options available on the market but there are consequences for your heirs if you get it wrong. Not only can your poorly drafted Will be contested but it can also cause stress and conflict for your heirs. The best way of ensuring that your wishes are followed on your death is to have your Will drafted by an experienced lawyer.

2. PROTECT THE ESTATE. A lawyer can help ensure that the decedent's wishes and the interests of their families are protected. Legal claims are sometimes made after a death. These claims against the estate are difficult to fight without legal training and experience. Hiring a lawyer to handle claims against the estate helps reduce the anxiety families feel when having to deal with an unfamiliar process at what may be a difficult time.

3. SPEED UP PROBATE. The probate process can be complex and, depending on the details of the Will, it may not run smoothly. An experienced lawyer can assist an untrained Personal Representative to navigate the legal process. They can help resolve the many financial and legal matters that arise with a minimum of fuss and delay.

4. SUPPORT PERSONAL REPRESENTATIVES AND HEIRS. As Personal Representative, you are likely to have many questions about how to fulfill your responsibilities. As an heir, you may have questions about the probate process and what to expect. A lawyer helps reduce confusion and doubt about these legal matters.

A lawyer can help Personal Representatives with court filings, debt settlement, appraising assets, and distributing inheritance. The role of Personal Representative is fraught with potential pitfalls that leave the PR open to personal legal risks. Some professional help may be a relief.

5. REDUCE FAMILY CONFLICT. A death can result in a range of emotional reactions. There is grief but it can also be a time of tension between family members and other heirs. Disputes about the estate based on differing expectations do occur. A lawyer may help reduce these tensions more effectively than people more closely involved. The professional detachment of a lawyer and understanding of the probate process can calm things down.

If you have been named Personal Representative in someone's Will and have questions about the probate process or how we can be of assistance, give us a call at 253.858.5434 to set up an appointment today.

Business owners have many options for creating different legal entities to own their business.

There are different legal entities you can create to own a business. Sole proprietorships and partnerships are the simplest, but owners expose themselves to potential personal liability if things go wrong. A limited liability company (LLC) may be able to shield you from that liability, depending on the situation. Business owners have many options.

WHAT IS A LIMITED LIABILITY COMPANY? An LLC is a type of business entity that provides many of the advantages of a corporation, combined with the tax advantages and flexibility of a partnership.

WHAT CAN AN LLC DO? LLCs can engage in any lawful, for-profit business or activity other than banking or insurance.

WHO MANAGES AN LLC? DOES IT NEED A BOARD OF DIRECTORS An LLC can choose a member to be the manager or hire an employee. A benefit of an LLC in Washington or Idaho is that it doesn’t need a board of directors like a corporation.

WHO CAN BE PART OF AN LLC? An LLC can be one or more members, including individuals, trusts, estates, partnerships, limited partnerships, corporations, other LLCs, or other business entities.

CAN AN LLC MEMBER BE A FOREIGN NATIONAL? Yes, but the person must have a U.S. Taxpayer ID Number if the business is engaged in a U.S. trade or business. If the person is working in the U.S. for the LLC, they will need the proper visa or be a permanent resident (have a “green card”) to do so legally.

ARE THERE RESTRICTIONS ON THE NUMBER OF MEMBERS? There needs to be at least one, but, otherwise, the number isn’t restricted.

HOW IS MEMBER COMPENSATION DETERMINED? That’s up to the members to decide. It need not be linked to how much ownership the member has.

ARE LLCS EASY TO CHANGE? After the LLC structure is created, it’s easy to add new members or sell interests to someone else. LLC paperwork requirements are more relaxed than the C-Corp business structure. Generally, LLCs have fewer restrictions on many administrative issues compared to other business entities.

WHICH BUSINESSES MIGHT BE A BETTER FIT FOR AN LLC? LLCs may be a good option for medium- or higher-risk businesses, owners with significant personal assets to protect, and owners who want to pay a lower tax rate than they would with a corporation.

HOW LONG DOES IT TAKE TO MAKE AN LLC? It’s not a long process. Most of the time is spent discussing with the client whether an LLC is the best fit for the business. It’s a matter of creating legal documents. Filing an LLC with the Secretary of State can be done online.

WHAT ARE THE BENEFITS OF AN LLC? Under an LLC structure, personal assets (e.g., a home, personal vehicle, etc.) are not subject to the debts and liabilities of the company. This liability shield is not foolproof, however. As with corporations, under limited circumstances, a person can “pierce the corporate veil” and can reach an individual’s personal assets. An LLC may be the right choice for short-term projects or joint ventures. Multiple businesses or individuals can work together, and there would be a specific dissolution date or term—the number of years the LLC is expected to exist.

HOW ARE LLC MEMBERS TAXED? Double taxation usually occurs with a corporate business structure. The corporation and the owners are taxed separately. An LLC prevents this because the LLC isn’t taxed (unless you want it to be taxed like a corporation), but members’ income is taxed as if they’re partners.

WHAT ARE THE DISADVANTAGES OF AN LLC? LLC profits are subject to self-employment taxes, including Medicare and Social Security. LLCs must retain more than one member or be subject to federal taxes as a sole proprietorship or corporation. LLC filing papers and regulatory requirements differ from state to state.

WASHINGTON LLCS. LLCs in Washington must file an annual report with the Secretary of State, and if they have more than one member, obtain an IRS Employee Identification Number. Washington LLCs must also appoint a registered agent with a physical address in the state of Washington, to receive service of process. Out-of-state LLCs doing business in the state of Washington must also appoint a Washington-based registered agent and register with the Secretary of State.

Although Washington does not require LLCs to have operating agreements, a solid operating agreement can address a variety of issues that may arise during the course of business. We can help draw up an operating agreement that will grow with your new company.

WHY HIRE A LAW FIRM TO FORM AN LLC? LLCs have specific requirements which must be met in order to obtain tax advantages. Setting up your business properly in the startup phase can save you significant money in the long run. An experienced lawyer can help you understand whether it’s the best choice of business entity for you, as well as help you navigate complicated regulatory requirements and keep up with mandatory filings.

We have provided legal services to small and large companies for decades. We can discuss the benefits of an LLC and whether it’s the right choice for your business. Give us a call at 253.858.5434 to set up an appointment today.

As you get older, it's important to have an estate plan in place to make sure your assets and property can easily be distributed to your family and loved ones after you pass away.

As you get older, it’s important to have an estate plan in place to make sure your assets and property can easily be distributed to your family and loved ones after you pass away. A Revocable Living Trust is an estate planning tool that helps you protect assets and safeguard your family’s future. If you’re thinking of establishing a Trust, consult us to prepare your estate planning documents and see how it fits into your estate plan.

WHAT IS A REVOCABLE LIVING TRUST? A Trust Agreement is an estate planning tool that describes how your Trust is going to be administered after you die. Similar to Wills, you can name the beneficiaries of the Trust and provide detailed instruction about which Trust beneficiary gets certain Trust property and assets. The real estate and other assets in an established Trust are distributed after the Trustor becomes deceased or incapacitated.

Revocable Trusts are called "Living Trusts" because they are established while you, the Trustor, are still alive. In a Trust arrangement, title to Trust assets and property is transferred to and managed by the Trustee.

Transferring the deeds and titles prevent assets held in Trust from being probated. Probate is the legal process of verifying a Will and administering a person’s estate. In most cases, the probate process can be costly and take a lot of time, making estate administration difficult for your family members. A Trust is a common way to avoid probate while making sure your last wishes are followed.

We can help you establish a Trust that makes the administration process easier for your family.

WHAT'S THE DIFFERENCE BETWEEN REVOCABLE AND IRREVOCABLE TRUSTS? Living Trusts can either be revocable or irrevocable. Since you can designate yourself as the Trustee, Revocable Living Trusts let you modify or revoke the Trust anytime. For example, you can remove a Trust beneficiary or include other heirs even after you set up a Trust. You can also change which Trust funds go to which beneficiary of a Trust, and how you want the successor Trustee to administer your estate and make distributions when you die.

This isn’t the case for an irrevocable Trust. After naming Trust beneficiaries, you won’t be able to change who can inherit the assets and property in a Trust account without getting their permission. Since you need to transfer ownership of assets and property in Trust and you can’t appoint yourself as the Trustee of an irrevocable Trust, you no longer have full control over the Trust.

We can help you choose the types of Trust that best fits your needs, whether it’s for avoiding probate, asset protection, or dealing with estate taxes.

HOW DO YOU CREATE A TRUST? If you’re ready to set up a Trust, the first step is collecting the relevant Trust documents. Take inventory of your personal property and assets you want to be held in Trust. Note that you may need to contact your bank and update your life insurance policies after you established a Trust.

The next step in setting up a Trust is to decide which family member (such as a surviving spouse, children, and grandchildren) or loved ones you wish to name as beneficiaries. You also need to assign Trustees who’ll be responsible for distributing your estate. Lastly, you should lay out specific instructions for Trust administration and tax liability

DO I NEED A LAWYER? As you get older, it becomes more and more important to have measures in place in the event of death or incapacity. Having Trusts and Wills as part of your estate plan helps you protect your family’s future. We can provide legal assistance in establishing a Trust and ensure that your estate plan protects your family, assets, and wealth. Contact us at 253.858.5434 to get started on your estate plan today!

What happens if you die without a Will, like Jimi Hendrix did in 1970? More than 50 years later, the bitter battle over his estate rages on.

Jimi Hendrix died without a Will in 1970, leaving behind an estate that’s currently valued at more than $160 million. And now, more than five decades later, the bitter battle over its control rages on, as the Hendrix Estate is suing the heirs of Jimi's bandmates over alleged royalties and copyright issues.

This is a prime example of what could go wrong when people die intestate (i.e., without a Will). It leaves your loved ones vulnerable, and more often than you'd think, you’ll have all sorts of people coming out of the woodwork to make a claim.

You don’t have to be a wealthy celebrity to have a Will. If you have any assets that matter a great deal to you, it’s always better to decide while you’re still alive who should get them. If you don’t, then state law steps in after your death to decides who gets what share of your estate. This is going to involve lawyers, judges, lots of money, lots of time, and the probate process.

WHAT DOES PROBATE MEAN? Probate is a legal term that refers to the process of proving a Will. It means making sure that the deceased’s estate is distributed fairly among the rightful heirs, whether or not there was a Will left behind. If there was no Will left behind, the process must go through probate court to decide how the assets will be distributed among the deceased’s loved ones. For smaller estates, the probate process doesn’t usually take long. The matter can be concluded in a matter of months. However, probate for bigger estates can takeyears, especially when individuals with legitimate claims to the property and assets file petitions in court to contest the Will. So, as you can expect, this could end up dragging out the process even longer.

WHAT DOES A PROBATE LAWYER DO? Probate lawyers wear many hats. The exact role they play in a probate process ultimately depends on whether or not the decedent had drafted a Will before their death. Here’s what a probate lawyer does in both instances.

THE ROLE OF A PROBATE ATTORNEY WHEN THERE’S A WILL. If an individual dies testate (i.e., with a valid Will), the concerned parties may retain a lawyer in an advisory role to offer guidance to the concerned parties. These include the beneficiaries or the estate's Personal Representative. For instance, the attorney may inspect the Will to check that it wasn’t created under duress or in a way that would contravene the interests and wishes of the person. This is particularly important if the decedent was elderly and suffered from dementia.

THE ROLE OF A PROBATE ATTORNEY WHEN THERE’S NO WILL. If an individual dies intestate, the decedent’s estate is distributed among the rightful beneficiaries according to the intestacy laws in the state where the property is located. Although these laws vary widely, in most states, the surviving spouse receives all the property. In such instances, an attorney may be hired to help the Personal Representative in the distribution of the assets according to the state laws. Keep in mind that regardless of what the deceased’s wishes were or the needs of the family members, the lawyer can only act within the confines of the state’s intestacy laws.

OTHER ROLES OF A PROBATE LAWYER. Aside from that, a probate attorney also helps the Personal Representative to:

* File the Will with the Court and make sure appropriate Letters Testamentary or Letters of Administration are issued.

* Give proper notice to all interested parties.

* Settle the deceased’s bills and debts.

* Collect and manage life insurance proceeds.

* Determine whether the estate owes any taxes.

* Find and secure all the deceased’s assets.

* Get the decedent’s assets appraised

WHEN DOES AN ESTATE HAVE TO BE PROBATED? Contrary to what you might believe, not every estate has to go through the probate process. It is only required when there are no other means through which the decedent’s property can be transferred to the estate heirs. If the individual had taken steps to distribute the assets before death, the estate doesn’t need to be probated. For instance, life insurance policies and retirement accounts usually have a designated beneficiary. These go directly to them on the death of the principal, subsequently bypassing the probate process.

The same goes for bank accounts with a TOD (transfer on death) or POD (payable on death) beneficiary designation and jointly owned assets with survivorship rights. In the latter, the surviving owner automatically inherits the deceased’s share of the property or asset.

In case you’re wondering how to avoid probate, here are three easy steps you can take:

* Name beneficiaries on all the accounts that you own. These include bank, brokerage, retirement accounts, and life insurance policies, and pension plans.

* Create and fully fund a Revocable Living Trust that leaves your assets and property to your beneficiaries upon your death. This allows for asset distribution without getting the courts involved.

* Hold your property jointly with your spouse or partner. That way, ownership automatically passes to them upon your demise.

GET LEGAL HELP. If you were named the Personal Representative of an estate, or a loved one died without a Will, you need to get in touch with an experienced lawyer as soon as possible. They’ll hold your hand through the entire process to ensure that the decedent’s estate is distributed fairly among the rightful beneficiaries. If you have any legal questions, give us a call at 253.858.5434 to set up an appointment today.

Hire a lawyer to help you fight back if you are getting lowballed by an insurance company after you've been hurt in an auto collision.

If you are getting lowballed by an insurance company after an auto collision, you are not alone. Insurance companies make low settlement offers to injury victims all the time, and they do so knowing that many claimants will agree to settle for far less than they deserve.

When dealing with an insurance company, it is up to you to protect your legal rights. If you let the insurance company decide what it will pay, you will only get a small fraction of the total amount you are rightfully owed (if that). But, by fighting back and asserting your legal rights effectively, you can collect the money you need to get back to your normal life. Here are some steps to take if the insurance company is lowballing you:

1. Get Help from a Lawyer. If you have not done so already, you should speak to a lawyer if the insurance company refuses to compensate you fairly. Insurers treat claimants who retain a lawyer differently than those without representation. Hiring a lawyer can get insurance company representatives to take you seriously and offer more substantial compensation. Your lawyer will be able to deal with the insurance company on your behalf, assisting you with each of the additional steps outlined below.

2. Make Sure It Is Actually a Lowball Offer. What makes you think the settlement offer is low? Is the insurance company offering less than the total costs you have already incurred? Or do you simply feel like you are entitled to more? While your intuition may be correct, you need to be careful not to reject an offer that adequately compensates you for your losses.

3. Figure Out Why the Insurance Company Is Lowballing You. Generally, insurance companies provide lowball offers because they are businesses committed to protecting the bottom line. Profits suffer when they pay out large claims. However, in some cases there may be a specific reason behind an insurer’s lowball offer:

(a) The Insurance Company Has Determined That You Were at Fault – When you bring a personal injury claim, the other driver’s insurance company might claim that you are partially at fault for the collision and make a low offer.

(b) The Insurance Company Has Undercalculated Your Losses – The insurance company could also be offering less than you deserve because it has undervalued your claim. Insurers often employ formulas to calculate compensation. These equations don’t always reflect your losses accurately, resulting in a lowball settlement offer.

(c) The Insurance Company Is Acting in Bad Faith – It is also possible that the insurance company is acting in bad faith. Unfortunately, bad faith insurance practices are not uncommon, and some insurance companies will make lowball settlement offers regardless of the facts at hand. If the insurance company is handling your claim in bad faith, you will need a lawyer to help you hold the insurer accountable.

4. Collect the Evidence You Need to Prove Your Claim. Once you know why the insurance company is lowballing you, you can then focus on gathering the evidence you need to prove your claim. Does the evidence show that you played no part in causing the accident? Do you have medical records, employment records, and other documentation that demonstrates the extent of your accident-related losses? In many cases, overcoming a lowball settlement offer is a matter of convincing the insurance adjuster that they have overlooked relevant information.

5. Keep Negotiating and/or File a Lawsuit. Ultimately, in order to overcome a lowball settlement offer, you need to be prepared to keep negotiating – and you may need to be prepared to go to court if necessary. Negotiating with the insurance company and preparing a lawsuit are steps that you will need your lawyer to take on your behalf. Your lawyer can also advise you regarding future settlement offers and advise you against actions that could make it more difficult to recover just compensation for your collision.

WHAT *NOT* TO DO IF THE INSURANCE COMPANY IS LOWBALLING YOU. In addition to taking the steps listed above, there are also some costly mistakes you need to avoid. Specifically, if you have received a lowball settlement offer for your auto collision:

1. Do Not Accept the Lowball Settlement as “Partial Payment” – Do not accept the lowball settlement and treat it as “partial payment” for your claim. Once you accept a settlement of any kind, your claim is over.

2. Do Not Give in to the Insurance Company’s Tactics – While dealing with the insurance company’s tactics can be frustrating, you should not give in. If you have suffered substantial losses as a result of your collision, it will be well worth fighting for the compensation you deserve.

3. Discuss Your Claim with a Lawyer. Filing an insurance claim after a car crash can be challenging. If you were seriously injured through no fault of your own, you should not have to settle for less.

At our law firm, we are committed to pursuing the full compensation you deserve. We have been representing injured people and their survivors for more than 20 years and can help you overcome a lowball insurance settlement offer. Please call us at 253.858.5434 today for a free case evaluation.

Here are some estate planning tools and techniques you can use to avoid probate in Washington.

Probate court proceedings (the process through which a deceased person's assets are transferred to the people who inherit them) can be long, costly, and confusing. It's no wonder so many people take steps to spare their families the hassle. Different states, however, offer different ways to avoid probate. Here are your options in Washington.

REVOCABLE LIVING TRUSTS. In Washington, you can make a Revocable Living Trust to avoid probate for virtually any asset you own--real estate, bank accounts, vehicles, and so on. You need to create a Trust Agreement (it's similar to a Will), naming someone to take over as Trustee after your death. Then--and this is crucial--you must transfer ownership of your property to yourself as the Trustee of the Trust. Once all that's done, the property will be controlled by the terms of the Trust. At your death, your successor Trustee will be able to transfer it to the Trust beneficiaries without probate court proceedings.

JOINT OWNERSHIP. If you own property jointly with someone else, and this ownership includes the "right of survivorship," then the surviving owner automatically owns the property when the other owner dies. No probate will be necessary to transfer the property, although of course it will take some paperwork to show that title to the property is held solely by the surviving owner.

In Washington, you and co-owners can hold assets in joint tenancy. Property owned in joint tenancy automatically passes to the surviving owners when one owner dies. No probate is necessary. Joint tenancy often works well when couples (married or not) acquire real estate, vehicles, bank accounts, or other valuable property together. Each owner, called a joint tenant, must own an equal share.

COMMUNITY PROPERTY AGREEMENTS. Many married couples in Washington create and sign community property agreements. This agreement between spouses typically provides that when one spouse dies, their property is immediately converted to community property and passes to the surviving spouse. Under Washington law, community property left through a community property agreement can be transferred to the survivor without probate.

PAYABLE-ON-DEATH DESIGNATIONS FOR BANK ACCOUNTS. In Washington, you can add a "payable-on-death" (POD) designation to bank accounts such as savings accounts or certificates of deposit. You still control all the money in the account--your POD beneficiary has no rights to the money, and you can spend it all if you want. At your death, the beneficiary can claim the money directly from the bank without probate court proceedings.

TRANSFER-ON-DEATH REGISTRATION FOR SECURITIES. Washington lets you register stocks and bonds in transfer-on-death (TOD) form. People commonly hold brokerage accounts this way. If you register an account in TOD (also called beneficiary) form, the beneficiary you name will inherit the account automatically at your death. No probate court proceedings will be necessary; the beneficiary will deal directly with the brokerage company to transfer the account.

TRANSFER ON DEATH DEEDS FOR REAL ESTATE. As of June 2014, Washington allows you to leave real estate with transfer on death deeds (TODDs), also called beneficiary deeds. You sign and record the deed now, but it doesn't take effect until your death. You can revoke the deed or sell the property at any time; the beneficiary you name on the deed has no rights until your death.

TRANSFER ON DEATH REGISTRATION FOR VEHICLES. Washington does not allow transfer-on-death registration of vehicles, but the Washington Department of Licensing does provide a simple form to transfer a vehicle's title by inheritance.

SIMPLIFIED PROBATE PROCEEDINGS. Even if you don't do any planning to avoid probate, your estate may qualify for Washington's simplified "small estate" probate procedures if the entire value of your estate is less than $100,000 and does not include any real estate.

Probate avoidance techniques have become a much bigger deal here in Washington since COVID. If you have questions about this or any other legal matter, 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.

Making substantial gifts to family members, friends, and charities can be an important estate planning tool.

Making substantial gifts to family members, friends, and charities can be an important estate planning tool. There are many benefits to gifting property, such as reducing your taxable estate, transferring tax obligations to your children or grandchildren who may be in a lower tax bracket, or making your estate smaller to avoid probate. Additionally, lifetime giving will provide you with the opportunity to bring joy to others while you are still alive. There are, however, a number of potential pitfalls for the unwary benefactor. A careful review of the current law and your own financial situation can help you determine if you should be gifting property to aid your estate planning goals.

Under federal law, gift tax and estate tax are intertwined. Estate and gift tax rates are applied to cumulative transfers made during one’s lifetime and at death. As of January 1, 2022, the federal estate and lifetime gift tax exemption amount is $12.06 million, or $24.12 million for a married couple. However, certain gifts do not count toward this tax exemption amount, including: gifts to charitable organizations, gifts to U.S. citizen spouses, gifts under $16,000 per year per recipient ($32,000 for a married couple), and direct payments of educational or medical expenses. For gifts over $16,000 (or $32,000 for a married couple) that do not meet any of the other exceptions, the person giving the gift will have to file a gift tax return (IRS Form 709). Once you die, your 709 Forms are added up and the total amount of gifts in excess of the annual exclusion amount are added back into your estate, increasing the size of your estate, to determine if any federal estate tax is due.

Under Washington and Idaho law, there is no gift tax. However, Washington imposes a tax on the estates of individuals who are residents of the state when they die or who own property (typically real estate) in Washington when they die. A Washington estate tax return must be filed by a person with an interest in property located in Washington if the estate exceeds $2.193 million. Unlike the federal estate tax exemption, the Washington estate tax exemption cannot be transferred between spouses, meaning you cannot combine both spouses’ Washington exemption to avoid paying Washington estate tax.

Due to the high estate tax exemption amounts under federal and Washington law, you may be questioning the value of making lifetime gifts. However, there are reasons to gift property even if your estate does not exceed the estate tax exemption amounts. To begin with, the current estate tax exemption amounts may be reduced in the future. The current federal estate tax exemption sunsets in 2025, and the exemption amount will drop back down to the prior law’s $5 million cap, which when adjusted for inflation is expected to be $6.2 million. The legislation for President Biden’s Build Back Better Act initially proposed to accelerate the sunset provision, although the present framework of the Act has eliminated this change. Further, gifting property to others may help you transfer tax obligations to your children or grandchildren who may be in a lower tax bracket, reduce your estate so that your inheritors can avoid probate (for Washington estates that do not exceed $100,000 and don't include any real estate), and shield property from medical assistance claims.

There are a number of potential pitfalls to making lifetime gifts. When you gift property, the adjusted basis (original cost) of the property remains the same (“carry over basis”). If the recipient sells the property and it has appreciated in value, the recipient will generally pay capital gains tax on the difference between the sale price and your adjusted basis. However, inherited property receives a “stepped up” basis, which is the market value of the property on your date of death. If the value of your estate falls under the estate tax exemption amounts, you may be better off not making gifts of low-basis property to family members while you are alive.

Another potential concern may arise if you end up requiring medical assistance. In Washington, there is a 60-month disclosure period on all uncompensated transfers, including gifts (“Medicaid look-back period”). This means that if you give property for less than fair market value within five years of applying for Medicaid, you could incur a penalty period of Medicaid ineligibility. This transfer penalty applies even if the gift is less than the federal annual exclusion amount.

If you're in a giving mood, you may want to consider gifting property to aid your estate planning goals. As long as you are aware of the potential disadvantages with lifetime giving and you can afford to reduce the value of your estate without impoverishing yourself, gifting property may be a helpful estate planning tool.

If we can help answer any gifting or other estate planning questions, please give us a call at 253.858.5434 to set up an appointment today.

There are many legal, financial, and practical aspects to be considered when you decide to sell your business.

Let's say you're an entrepreneur who has started and built your own business, or maybe you’ve inherited a business. Perhaps the business is booming, and competitors are interested in acquiring it. Or perhaps you’ve decided it’s time to retire, or simply to move on to other ventures. If you’ve decided to sell your business, there are many legal, financial, and practical aspects to be considered. What exactly are you selling? How can you be sure, once you get an offer, that you are getting the full value for your business? How will you be paid, and will you be financing the deal?

We can help you with selling your business and advise you on how to proceed. You’ve worked hard to build an enterprise, and likely invested a significant portion of your life and significant personal resources. Make sure you receive the full value of what your business is worth. We are based in Gig Harbor but we represent throughout Washington and Idaho.

Before you start the process of selling your business, it’s important to have experienced legal eyes review your current situation. Selling your business without sufficient attention to certain details could leave you on the hook for significant liability should anything go wrong in the transfer or if anything goes wrong for the buyer in the future. For instance, it’s important to carefully review your contracts. You likely have many contracts with vendors, clients, and employees. The contracts may have clauses that negate or change the terms of the contract in the event of any change in ownership. Some contracts may even be written as an agreement between you and the other party, instead of between the other party and the business.

A smart buyer will engage in due diligence before purchasing your business. It’s very important to have your ducks in a row. If you start a sale only to have the buyer pull out because they discovered something negative in the due diligence process, not only have you lost critical time and wasted effort, but you could wind up with a bad reputation that could hurt opportunities for other sales.

Your business likely consists of many elements in addition to the legal entity - the LLC, corporation, partnership, or other legal structure. There’s the intellectual property - your brand. There’s the equipment and inventory. There’s the real estate. There’s the list of clients and customers that make up how revenue comes in.

When you’re selling your business, it’s very important to understand what exactly you are selling. You may intend to sell only the legal entity and the intellectual property, but your buyer may be expecting much more. You could be expecting to retain significant control of the business after the sale, while the buyer is expecting you to go. Any misunderstanding could lead to lawsuits and expensive litigation.

One way to clear this up in advance is a well-drafted letter of intent (LOI). A LOI that fully covers your bases can make sure that every element is clear between the seller and the buyer. We can understand your goals and desires in selling your business, and help draft a letter of intent that correctly conveys those wishes.

With the many assets and elements that make up your business, it can be difficult to ascertain a price that truly reflects the value of your company. We can assist you in discovering the true value of your business. A person may offer an amount for your business, but that offer can mean different things. For instance, how will this person pay you? Many deals for businesses are not in cash. Will you be financing a portion of the deal? If so, what kind of control will you have over the company, and what kind of liability will you be on the hook for? We will make sure the right questions are asked, and we can help you fully understand the ramifications of the many decisions you will have to make.

When selling your business, it’s critical to be prepared, and, once the process begins, to fully understand the consequences, both positive and negative, for every choice you make. We can advise you through the sale of your company. To schedule a consultation, call us at 253.858.5434 today.

You might think a Revocable Living Trust is only for rich people or that they're hard to create. But they can be a perfect estate planning tool for many clients.

The whole concept of a Revocable Living Trust has a certain mystique. You might think they're only for very wealthy people, or that they're a lot more difficult to create than a simple Will. But they can be a perfect estate planning tool for others.

Revocable Living Trusts come with both pros and cons, from avoiding probate to the costs associated with setting one up. Deciding if one is right for you can depend on your personal concerns and circumstances.

ADVANTAGES OF A REVOCABLE LIVING TRUST.

(1) Avoid Probate. Assets held in a Trust avoid probate because the Trust itself doesn't die with its creator. The Trust remains up and running after the death of its Trustor, and it can transfer its property to anyone the Trustor has provided for in the Trust's formation documents, according to the Trustor's own terms. There's no need for court oversight or involvement.

Probate avoidance is probably the greatest advantage of a Revocable Living Trust. It can be a particularly important consideration if you own real estate in more than one state because your loved ones would be faced with two or more probate proceedings in this case if you just leave a Will. Each property would have to be probated where it's located.

A Revocable Living Trust can also give your loved ones almost immediate access to cash during a difficult time. Your loved ones are typically unable to gain access to your bank account until a probate estate has been officially opened. Ask yourself how they'll pay for funeral costs and other necessary expenses until this time. Opening a probate estate can take several weeks.

(2) Avoid Guardianship or Conservatorship. Revocable Living Trusts aren't just about death. They can allow your loved ones to avoid both a costly court-supervised guardianship if you become disabled as well as a costly court-supervised probate proceeding after you die. Your loved ones and your property would be subject to the restrictive rules of guardianship or conservatorship if you should become incapacitated. Forming a Revocable Living Trust involves naming a successor Trustee, someone to step in and manage the Trust for you if a time comes when you're no longer able to tend to your personal affairs yourself.7

Your successor Trustee can take control of your Trust assets without the interference of the court after following your trust's provisions for determining your incapacity.

(3) Keep Things Private. Probate is a public proceeding. Anyone can go to the courthouse and take a look at each and every document filed there, including your Will. Strangers can even look up court dockets and filings online in some states. Anyone can see the extent of what you owned to leave to others, and they can find out who got what when probate is opened and your Will is placed with the court. Trust documents are never filed with a court, so they don't become a public record.

DISADVANTAGES OF A REVOCABLE LIVING TRUST.

(1) Funding a Trust Is Expensive...And a Pain. It generally costs more time and money to set up and fund a Revocable Living Trust than to simply write a Will—as much as three times more, at least initially. But in actuality, the cost can end up being pretty comparable because probate costs money, too. That expense would have to be added to the cost of writing a Will for a fair comparison.

You must create new deeds and other documents to transfer ownership of your assets into the Trust after you form it. You'll have to contact your bank, investment and insurance companies, and transfer agents. You'll have to change account and stock ownership and update beneficiaries. New stock certificates must be issued. Cars and boats must be retitled.

This is the major drawback to using a Revocable Living Trust for many people, but it's not worth the time, money, and effort to create one if the Trust isn't fully funded. The type of assets you own and what must be done to get them funded into the Trust should be carefully considered before you decide to use this estate-planning tool.

(2) You'll Still Need a Will and an Estate Plan. Your Trust might only be partially funded when you die if you acquire new assets and neglect to move them into the Trust. It can be surprisingly easy to forget to transfer title to newly acquired assets to your Trust as time goes by.

You'll need a special type of Will called a "pour-over" Will to "catch" your unfunded assets in this case. The Will "pours" them into your Trust at the time of your death, as the name suggests. Your pour-over Will must be probated, but it can still be an invaluable worst-case-scenario backup tool.

Additionally, some assets can't be owned by a Trust. These include certain retirement plans and assets you might hold jointly with someone else. For example, you can't transfer ownership of your half of a house to your Trust if you own it as a joint tenant. You'll need an alternate means of moving ownership of these assets, but you can still avoid probate if you make use of beneficiary designations.

(3) Your Heirs Have Longer to Contest a Trust. Most states have specific statutes that dictate who can challenge a Will and how long they have to do so. The time period can be as little as 30 to 120 days. Contrast this with contesting a Revocable Living Trust, which until recently was a wide-open court proceeding subject only to state-specific ​statutes of limitations. These statutes are usually one to six years, but they're sometimes even longer.

Several states have begun to close this gap by enacting specific laws that severely restrict the timeframe for challenging a trust.

THE BOTTOM LINE. It's important to speak with a legal professional when you're tackling something as important as estate planning. You'll want to be completely sure that you understand all the pros and cons of your decisions. If you have questions about Revocable Living Trusts and estate planning in Washington or Idaho, give us a call at 253.858.5434 to set up an appointment today.

We Have Been Representing Nonprofit Organizations for More Than 25 Years

We have been representing nonprofit organizations for more than 25 years. If you are looking to start a nonprofit organization for charitable, educational, scientific, artistic, benevolent, religious, or other tax exempt purposes, give us a call at 253.858.5434 to find out how we can help. We proudly represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.

Families with special needs children must exercise extra care in making their estate plans. This is true whether their child is still a minor or now an adult.

Families with special needs children must exercise extra care in making their estate plans. This is true whether their special needs child is still a minor or now an adult, and particularly so when the child is or in the foreseeable future will be receiving needs-based public benefits such as SSI or Medicaid. While planning considerations for such a child will vary depending upon the child s age, competency, and other family considerations, the goal is always the same: parents want their estates utilized to enhance and enrich the life of their special needs child while maintaining the child's eligibility for essential public benefits programs. These goals can be met through the use of a properly prepared Special Needs Trust.

The essence of all special needs estate planning is to ensure that the portion of the parents' estate which passes to their special needs child at the time of their death is not considered an available asset, as defined by public benefit agencies. Parents must be mindful of both income and principal, as too much monthly income, as well as too much cash, can negatively impact their child's future eligibility for benefits.

PURPOSE. Special needs planning works to preserve public benefits for the disabled child while supplementing and enhancing the quality of the child's life. This type of planning is useful for many different purposes, including:

* lifetime money management for the benefit of the disabled child;

* protecting the child's eligibility for public benefits; and

* ensuring a pool of funds available for future use in the event public funding should cease or be restricted.

PLANNING OPTIONS. The options available to families in making an estate plan for a special needs child who is receiving needs-based public benefits include the following:

* Disinherit the child. This is the simplest option, but it does nothing to accomplish the essential purpose of enriching the life of the special needs child.

* Give the estate to the brothers and sisters. At the parent's death, the entirety of the estate is distributed to the child's siblings, with the understanding that they will take care of their disabled sibling. There are inherent risks with such an approach, including claims by the siblings creditors, bankruptcy, divorce, mismanagement of funds, etc. This may be appropriate when the child s potential inheritance is modest.

* Leave an inheritance to the disabled child. The outcome of this planning option will be the almost certain negative impact on the child s continued eligibility for publicly funded benefits. At the least, benefits may be reduced. In the worst case scenario, the child may be rendered ineligible for SSI and Medicaid, and with this ineligibility for assisted housing, supported employment, vocational rehabilitation, group housing, job coaching, attendant personal care aides, and transportation assistance. The key benefit is Medicaid, as this program represents the child's ability to access not only essential health care but many other public assistance programs.

* Leave any inheritance in a Special Needs Trust. This last option will be preferred by most families in their efforts to provide and ensure a positive outcome for a special needs child. By using a properly drafted and properly administered Special Needs Trust, the child will continue to qualify for public assistance programs that would otherwise be unavailable to the child, especially the means tested programs that require the child to meet strict financial eligibility criteria. A Special Needs Trust works because the assets held in the Trust are not available to the child. These types of Trusts must be discretionary Spendthrift Trusts, with strict limits on the Trustee’s ability to give money to the child. Under no circumstances can the special needs child force the Trustee to make Trust money available to the child. An additional benefit of the Special Needs Trust is that because the child is often unable to manage their own finances, the parents, in creating the Trust, will appoint a Trustee to act as the child’s money manager, and in so doing, ensure proper financial management after their death.

DURING LIFE OR AT DEATH? Families have the option of creating a Special Needs Trust at their death by incorporating a trust within a Will. This is called a testamentary trust.

The other option is for the parents to create a Special Needs Trust while alive—not surprisingly, this is often referred to as a living trust (or inter vivos trust). The advantages of the living trust include:

* the avoidance of probate;

* the creation of a Trust to which other family members can make contributions, most usually the grandparents; and

* an opportunity for a Co-Trustee to gain hands-on experience in administrating the Trust.

REVOCABLE OR IRREVOCABLE? Tax considerations come into play in the decision to make the Special Needs Trust either revocable or irrevocable. Generally speaking, the family will make the Trust revocable whenever the goals include maintaining maximum control over the Trust and the family is not concerned with income tax considerations. Correspondingly, the use of an irrevocable Trust may be appropriate when the family is concerned with income tax considerations and, if more than $1 million will be going into the Trust, possible federal estate and gift taxes.

SELECTING YOUR TRUSTEE. The Trustee will be responsible for administering your Special Needs Trust, so selecting your Trustee is one of the most important decisions your family will make in ensuring the long-term success of your Special Needs Trust. Given the natural pressures inherent in all families, someone in your family may consider the funds in the Special Needs Trust as their money, rather than the money of your special needs child. This can be a dangerous situation, especially as to your child’s continued eligibility for public benefits. For some families, it is best to consider selecting an independent, non-family member to serve as your Special Needs Trustee. The range of options includes:

* a parent, sibling or another distant relative;

* an attorney;

* a Trust company or a financial institution;

* a non-profit organization—especially one with experience in special needs; or

* Co-Trustees, usually a family member acting with a trust company.

The selection of any of these potential Trustees has both advantages and disadvantages. You should closely counsel with your lawyer before making your Trustee selection.

By working closely with your lawyer, your CPA, and your financial planner, you will develop an understanding of the options available to you and your family in making an appropriate estate plan for your special needs child. After making your wishes known and getting the appropriate documents in place, you will have taken crucial steps in assuring that this child will receive proper care when you are no longer able to provide that care yourself. If you have questions about Special Needs Trust or how we can be of service to you and your family, 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.

A Durable Power of Attorney is an estate planning tool that can make it easier for a friend or family member to manage your financial and health care decisions if you become incapacitated.

A Durable Power of Attorney is an estate planning tool that can make it easier for a trusted family member or friend to manage your financial affairs and your health care decisions if you become incapacitated, either due to age, illness, or injury.

If you created a Durable Power of Attorney years ago and haven’t looked at since the ink dried, it’s probably time to review it. As with any estate planning documents, it’s important to evaluate your DPOA periodically to ensure it’s still meeting your needs. Things change over time, and there may be good reasons to update the document.

Many people rush through creating powers of attorney without thinking through all of the potential implications of their decisions. That decision can have disastrous consequences. A recent Forbes article highlighted some of the potential dangers that can come with powers of attorney created without a lot of thought. Those dangers include the following:

1. Appointing a family member based on relationship rather than their ability to do the job effectively.

2. Naming two family members to work together as co-agents. While this can work in certain situations, consider your agents’ ability to act if one of them was traveling or otherwise inaccessible.

3. Not verifying that your power of attorney meets your financial institutions’ needs and requirements.

4. Not requiring any oversight for your agent. This can be accomplished by requiring your agent to provide periodic accountings to another trusted person.

5. A failure to understand that most powers of attorney are effective immediately when signed.

Is your power of attorney up to date? We never know when incapacity might strike, so don’t put off reviewing and updating your power of attorney. Contact us today to discuss your options and to make sure all of your estate planning documents adequately reflect your wishes and goals. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.

What to Bring to Your First Meeting with Your Lawyer After an Auto Collision

If you get hurt in an auto collision, you will want to reach out for legal help to make sure that the person who caused your injuries is held responsible. While bringing all of the documentation from your collision might seem like it’s invading your privacy, you’ll want all the proof you have. The more proof you present, the stronger your case will be.

When you’re meeting with your lawyer for the first time, and you’ve never had a meeting with a lawyer for anything before, you might be nervous. You probably don’t know what you need with you, but you want to come prepared. Here’s a list of documents you should bring when you meet your lawyer:

MEDICAL RECORDS. Your medical records will be the most important documentation that you can bring with you. Not only do they prove your injury, but they also give you a starting point for the statute of limitations. Your lawyer doesn’t need your complete medical history, just the records that are relevant to your injury and treatment. If you took any photos of your injuries, especially with timestamps, you should also bring those along.

RECEIPTS AND PAYSTUBS. Your financial information might feel just as private as your medical records, but receipts and paystubs will help further prove that you deserve compensation for your costs and any lost wages. Make sure you bring your financial records of any costs you incurred from your injury or any other damages. Also bring your paystubs to show if you have missed any paychecks because your injuries kept you from working.

POLICE REPORTS. When someone else caused your injury, you should file a police report so it can be on record and investigated if necessary. A police report gives you evidence of the incident and informs your lawyer who the police believe was responsible for your injury. At the collision scene, you should have taken photos with a timestamp, so bring pictures with you if you took any.

INSURANCE INFORMATION. Whether it’s your own insurance, the liable party’s insurance, or your employer’s policy, you should bring any relevant insurance information with you for your first meeting. This way, you are prepared to give your lawyer anything regarding insurance that they might need.

WITNESS INFORMATION AND REPORTS. After a collision that results in an injury, if you are able to, you should ask any witnesses for their contact information and if they’ll give an account of the incident. This helps boost your case because witnesses can confirm your statements or help prove who is responsible.

PERSONAL ACCOUNT AND TIMELINE. Although you probably know your account of events forward and backward, it will help for you to write it down so that you can get all the facts into one narrative. Arranging everything you remember into a timeline will help you when you meet with your lawyer because you will have a reference for any questions they ask you.

GIVE US A CALL. What if you have all of your documents collected to bring to a lawyer, but you don’t have one to represent you just yet? You can trust us to get you fairly compensated and obtain justice for you. We will work tirelessly so that the liable party is held responsible for their actions and you get the compensation you deserve for your injuries. Before you bring everything in so we can review your case, reach out to us at 253.858.5434 to schedule your free initial consultation.

Blended families need extra attention during the estate planning process because the inheritance rights of stepchildren are not as clear as those of biological children.

Blended families need extra attention during the estate planning process because the inheritance rights of stepchildren are not as clear as those of biological children. One of the biggest mistakes you can make is failing to do any estate planning at all.

Passing away without a valid Will, referred to as dying "intestate," invokes your state's laws of intestate succession. These laws spell out who inherits your estate. Stepchildren do not inherit under either Washington's or Idaho's current laws of intestate succession. If you have biological children and stepchildren and you want the stepchildren to inherit from you, you will need to take decisive action and make those wishes known by executing a valid estate plan.

For your stepchild to inherit from you, you must specifically name them in your Will or Trust. If your Will or Trust simply uses a common phrase, such as “all my children”, that will not include your stepchildren. Hiring an experienced lawyer to draft this language is imperative to making sure this is done correctly. Many mistakes in drafting can be made that cause unintended consequences.

Another way to include stepchildren is to legally adopt them. Adopted children inherit from you the same way as biological children.

You can also name stepchildren as beneficiary designations on your retirement accounts or life insurance policies. This will allow them to inherit this particular asset but does not extend to other assets. A stepchild can be listed as the Transfer on Death (TOD) beneficiary for your bank accounts which will allow the bank to transfer funds to the stepchild upon your death, bypassing the probate process. To include a stepchild in real estate transfers, add them as a joint owner with right of survivorship or prepare a Transfer on Death Deed (TODD) (in Washington only). As you can see, there are many ways to provide for a stepchild, but they require planning and action.

One other very important circumstance to consider involving stepchildren and inheritances is when you do not want your property to funnel through to a stepchild, there are also actions you may need to take to prevent it. A common scenario is that a husband leaves everything to his wife upon death. The widow now owns all the assets and they have a biological child together, she has a child from a previous marriage and then she remarries and has another child from the subsequent marriage. When the wife dies a few years later, those assets then go equally to all three of her children. This may be problematic if the husband intended to provide only for his own biological child who now only gets one third of the inheritance intended. To avoid this situation, the husband should set up a Trust for the wife to benefit from the assets during her lifetime but upon her death, the assets then go to his biological child.

To discuss estate planning techniques for blended families, please contact us to set up an appointment today. You can schedule an appointment with our law firm by calling us at 253.858.5434.