Using online Do-It-Yourself estate planning services can lead to expensive and unpleasant mistakes. Hire an experienced professional who is trained and educated in the law.

As a lawyer whose practice is primarily estate planning and probate, I have seen hundreds of estate planning documents, including some from do-it-yourself online services. I appreciate that using a DIY site to draft a Will can save money and time. But I also know that doing it this way can lead to expensive and unpleasant mistakes.

I recently saw one DIY online estate planning kit (hawked by a woman who claims to be a finance expert - we won't mention any names, but it rhymes with Shmuze Shmorman) whose estate planning “packages” had the same document labeled with three different names. Worse, the packages I looked at were missing a key estate planning document which very few users would know to ask about. This service, like many other DIY estate planning sites, claims to have attorneys on staff, but access to specific help for your personal documents is rarely available. If personal advice is offered, it then appears to cost a great deal more to receive.

But what if you don’t know which questions to ask?

ONLINE DIY WILLS vs. HIRING AN EXPERIENCED PROFESSIONAL TRAINED AND EDUCATED IN THE LAW. For some people with complicated personal and financial lives, today's complexities may not be fully addressed with a do-it-yourself service for Wills and Trusts. While many of us would prefer to fill in the blanks in silence than have to talk to anyone about our doubts or concerns, sometimes it helps — a lot — to get professional advice.

If you prepare your taxes yourself and they end up incorrect, you and the IRS may end up working things out. If you decide to do your estate planning by yourself, however, you may never know the results of your work, but your loved ones will.

There are lots of DIY options for completing your own estate plan, and they have been available almost as long as we have had the internet. (Longer, if you count all the software packages you could buy off the shelf.) With the ease and availability of these programs, and their low price, you might think more of us would have an up-to-date estate plan. Yet according to the AARP article, "Haven’t Done a Will Yet?," “only 4 in 10 American adults have a will or living trust.”

WHAT GOOD ESTATE PLANNING IS ALL ABOUT. Our power to express our preferences is what good estate planning (or life planning) is all about. As I've said to clients so many times before, every client and every client's family is unique and different; there are no one-size-fits-all, cookie-cutter documents or plans that fit every family in every situation.

Depending on the client's situation, some very basic estate planning documents can include: a Will, a Revocable Living Trust Agreement, a Durable Power of Attorney, a Health Care Power of Attorney, a Directive to Physicians (commonly called a "Living Will"), and if you live in Washington, Idaho, California, Arizona, New Mexico, Nevada, Texas, or Louisiana, a Community Property Survivorship Agreement. If you plan to use any or all of them through a DIY site, expect to be offered a fill-in-the-blank approach. Keep in mind that each state has its own probate code (the body of law governing estate planning and implementation) and its own state estate tax laws. The software package you use may have different names for the same documents I have listed above.

Some of the DIY sites I visited have all of these documents for you, but only if you purchase their higher-end packages. Some offer limited attorney consultation; on one site, it was really a drop-down of questions with pre-written responses, not an actual conversation with an attorney.

One other major problem with these DIY sites is that they push customers really hard to do a Revocable Living Trust, but don't explain what a Revocable Living Trust actually is or does and definitely do not advise or assist customers with the most important part - actually funding the Trust, because without that, the whole plan falls apart.

PROS AND CONS OF DIY ESTATE PLANNING. The advantage of using a DIY service is that you will have a plan, as quickly and cheaply as possible, and that may be better than having no plan at all. This is especially true regarding getting a Will, Powers of Attorney, and Directives to Physicians. Those handle most emergencies for people who don’t own real estate or much else.

The range of DIY services also has a range of prices — like $69 for just a Will, to several hundreds of dollars for what may be described as a “complete plan.” Some sites have more information than others about their options. Most presume that you already know what you want. But the reality is that many people have no idea what they want or need. Once you get into the complexities of family dynamics and perhaps Trust language specific to your state and situation, DIY estate planning can cause more challenges than working with a team of professionals.

MY CAUTION ABOUT DIY ONLINE WILLS. Here is my caution, based on my experience: You don’t know what you don’t know. You know some things about how you want to dispose of your assets after you die. What you may not know is all the case law and legislation that have evolved into your state’s probate code. If you do decide to look for a lawyer who does estate planning, I recommend interviewing two or more. This way, you will get a feel for how each handles client relationships, payment, and follow-up. You may already have other trusted professionals (a CPA, a financial planner, etc.) who can refer you to estate planning attorneys in your area.

However you choose to get your plan completed, DIY or with the help of an experienced lawyer, please get your estate plan done, and soon. You never know what surprises life will bring that will invoke your estate plan.

If we can be of service to you, your family members, friends, neighbors, or co-workers, give us a call at 253.858.5434 to set up an appointment today. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.

Are you thinking about starting up a new business in Washington? Here are some tips.

Are you thinking about starting up a new business in Washington? Here are some tips:

STEP 1: FORM ENTITY. The first step in starting a new business would be forming your business entity. You should almost always run your business through an entity structure. That’s usually going to be an LLC – the most popular choice right now. There are many other business entity types out there. For example you could form a corporation (a C corporation or an S corporation), limited liability partnership, or limited partnership. All these business entities have pros and cons, and we can help you figure out which entity structure might be best for you.

Before you get into the process of actually forming that entity, you should make sure the business name is available. You want to check whether other businesses are using that name. We can help. You also want to make sure your name is not trademarked. We can help you figure that out as well. And you want to make sure your domain name or website is available.

Once you’ve selected an available name for your business, consider drafting an operating agreement. However, you might not need an operating agreement if, for example, if there will never be multiple owners of the business, and you never intend to buy real estate. In that situation, you might be perfectly fine operating your business without an operating agreement.

After drafting and signing your operating agreement, you can officially form your business entity by filing with the Washington Secretary of State. Usually you file online, but you can do it through the mail with a paper submission if you prefer.

STEP 2: OBTAIN EIN. Step 2 in the process of forming your business would be to get an EIN (employer identification number) from the IRS. An EIN is a business’s federal tax identification number, and you’ve got have one to operate a business in the U.S. Usually an owner of the business must have some sort of tax identification number as well. If you are a citizen, that would simply be your social security number. If you are not a citizen but you have resident status in the U.S., then you may have been issued a different type of tax identification number. You can still form a business even if no owner has a tax identification number as an individual, but the business can only function as a place holder–it cannot do much. An exception is when an owner intends to obtain a tax identification number in the near future. In that situation, the business can operate normally, but only for about six to twelve months while the owner obtains their individual tax identification number.

STEP 3: MASTER BUSINESS LICENSE. The next step in the process of forming a business in Washington would be to get a master business license. A master business license is a Washington State business license, and you get it from the Department of Licensing. It is a fairly simple process. You just go online, check some boxes, and pay a fee.

STEP 4: LOCAL LICENSES. Step 4 in the process of forming a business in Washington would be to get your local business licenses. For example, if you have locations in Seattle, Everett, and Bellevue, you would need business licenses from each of those cities. Usually you will get local businesses licenses directly through the city, but in some situations, you can obtain them online during the master business license application process. Some cities cooperate with the state to simplify the process.

STEP 5: SPECIALTY LICENSES. The next step is researching and obtaining specialty business licenses. There are a host of these specialty licenses that apply to a vast number of businesses. Unless you have experience running a business of the type you’re contemplating, you should research specialty licensing carefully. The State of Washington produced an eight-page list of specialty licenses, and with each line containing a difference specialty license. For example a restaurant might need food handler’s permits, liquor licenses, and the like.

STEP 6: BANK ACCOUNT. The sixth step: opening a businesses bank account. Usually you can’t get your business bank account prior to completing most of the other steps listed above, because the bank with request your business’s identifying numbers, such as your EIN and UBI.

MISCELLANEOUS STEPS. There may be other, miscellaneous steps to complete that might or might not apply to you. Some examples:

* Financing. If you are trying to raise financing for your business, there are a number of regulations. You typically cannot raise money by selling ownership interests to the average person.

* Zoning and Local Codes. You should pay special attention to zoning and local codes if you intend to run your business from a location that did not contain a similar business before you.

* Hiring Employees.

If you have questions about starting up your new business, give us a call at 253.858.5434 to see how we can help.

Achieving a Better Life Experience - ABLE - Accounts are an innovative tool for gifting and saving funds while protecting eligibility for critical benefits for disabled family members.

Achieving a Better Life Experience Accounts—better known as ABLE accounts—are an innovative tool for gifting and saving funds while protecting eligibility for critical medical and cash benefits for disabled family members. These accounts do not replace the important role of Special Needs Trusts, but they do offer an alternative for those managing gifts and earnings under $16,000/year, as well as those with larger Special Needs Trusts who would like to provide an additional way for the beneficiary to save and spend money without disrupting benefits like Medicaid and SSI.

WHAT ARE ABLE ACCOUNTS AND WHERE DID THEY COME FROM? ABLE accounts are tax-advantaged savings plans, similar to the more familiar 529 Pre-Paid Tuition and College Savings Plans (in fact, ABLE accounts are found under Section 529A of the Internal Revenue Code).

These accounts were authorized by Congress in 2014 but have been slowly picking up steam as states create their own programs. In the Northwest, Oregon beat Washington to unrolling ABLE Accounts, but Washington residents who enrolled in the Oregon program can convert to the Washington ABLE program. Washington residents setting up new ABLE accounts can work directly with the Washington State ABLE Savings Plan.

With an ABLE account, a person disabled before their 26th birthday can place up to $16,000 each year (from any source) into the account, up to a federal maximum of $100,000 without the funds counting toward the SSI $2,000 asset limit. Disabled account holders who are working can also contribute an additional amount equal to the beneficiary’s annual earned income, up to $12,140. The interest growth is tax-free, and the funds are considered exempt assets for purposes of Medicaid and SSI.

WHAT EXPENSES CAN BE PAID FROM AN ABLE ACCOUNT? Funds from ABLE accounts may be used to pay for Qualified Disability Expenditures (QDEs). These are expenses related to the account holder’s disability, for their own benefit. These expenditures may include:

* Education

* Housing

* Care Management

* Financial Assistance

* Transportation

* Basic Living Expenses Related to Disability

* Legal and Accounting Fees

* Disease Prevention

* Assistive Devices

For many disabled ABLE Account holders, the best feature (as compared with traditional Special Needs Trusts) is that they can pay for expenses directly themselves, using a pre-paid card that acts like a normal debit card. In states offering ABLE Accounts with the pre-paid card option (including Washington and Oregon), this gives account holders a degree of freedom and experience with handling their own finances that is strictly limited under Special Needs Trusts.

WHAT IF I ALREADY HAVE A SPECIAL NEEDS TRUST? DO I NEED AN ABLE ACCOUNT TOO? Many people who are beneficiaries of a Special Needs Trust (also called a Supplemental Needs Trust, or an SNT) will benefit from opening ABLE accounts. Examples include:

* An SNT beneficiary who is employed on the Ticket to Work program

* A Special Needs Trust Trustee who wants to give the Trust’s beneficiary the ability to choose how to spend some of the Trust’s funds

* A disabled person with a third-party SNT, but who has received money for Christmas or as the result of a small inheritance

In each case, an ABLE Account can provide additional support for a disabled person who already has a Special Needs Trust. For those on the Ticket to Work program, earnings can quickly accumulate above the asset limit; opening an ABLE account gives the disabled worker a place to safely accumulate earnings and work toward savings goals. Trustees who want to give SNT beneficiaries more freedom to manage funds may distribute up to $16,000/year out of the Special Needs Trust and into the beneficiary’s ABLE account, giving the beneficiary flexible dollars they can save and spend on their own Qualified Disability Expenses. And for beneficiaries of third-party Special Needs Trusts, an ABLE account provides a way to save gifts they have received, outside of the third-party trust (and not triggering a Medicaid payback on the entire Special Needs Trust).

ARE THERE MANY RESTRICTIONS? Before opening an ABLE account, disabled savers and their families should carefully examine the rules and choose a program with the benefits they need most, such as low fees or a pre-paid card option. They should also keep in mind the critical rules of the program:

* The account holder must have been disabled before their 26th birthday

* No one may have more than one ABLE account without triggering non-exempt asset rules for Medicaid and SSI

* The maximum annual contribution, from all sources, is $16,000 (as of 2022)

* The maximum account total is $100,000

* The funds may only be used for the account holder’s Qualified Disability Expenses

Keep in mind that unlike Third-Party Special Needs Trusts, assets remaining in an ABLE account at the time of the disabled person’s death will be subject Estate Recovery from Medicaid.

DO I NEED A LAWYER TO OPEN AN ABLE ACCOUNT? ABLE accounts may be opened without the expense of setting up a trust. However, many families considering the ABLE program may also benefit from a consultation with an experienced lawyer who can help them decide on the best ways to save while also protecting vital health care and cash benefits. For many families, ABLE is just one piece of the puzzle in providing financial security for a disabled family member.

If you have questions about ABLE accounts, or any other estate planning issues regarding disabled family members, give us a call at 253.858.5434 to set up an appointment today.

When it comes to estate planning, there is no such thing as "normal" or "what everyone else does." Every family is different and every family's situation is unique.

When we meet with clients to talk about their estate plans and when they tell us what they'd like their Wills and Trusts to do, they often ask, "What do other people do? Is this normal?" To which we always have to respond, "There's no such thing as 'normal.'" Every family is different and every family's situation is unique. Family members all have different skills, different talents, different goals, and different needs. We represent clients regarding their estate plans with the fundamental belief that there is no cookie-cutter, one-size-fits-all estate plan. Wills, Trusts, Powers of Attorney, Health Care Directives, etc. all apply differently to different individuals and individual families.

We create customized estate plans that fit each client's individual goals, needs, and situations. If you have questions about a personal, customized estate plan to take care of your family and loved ones, 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, whatever is most convenient for the you.

"Discovery" is the pre-trial process of exchanging information between the parties in a lawsuit. There are numerous types and purposes, and not everything is discoverable.

If you’ve been inside a courthouse, you’ve probably seen lawyers wheeling around Samsonite catalog cases or pushing folding carts stacked with cardboard boxes. You may have asked yourself: what is all that stuff? Those cases and boxes contain some pleadings and case notes. But most of the contents represent evidence obtained from arguably the most important phase of a personal injury lawsuit: the discovery phase.

WHAT IS DISCOVERY? The term “discovery” is used to describe the pre-trial process of exchanging information between parties to a lawsuit. Discovery enables litigants to compel adversaries to turn over evidence in their possession before trial. Discovery is a formal process that exists in both civil and criminal cases and, for the most part, takes place outside the courtroom.

WHAT'S THE PURPOSE OF DISCOVERY? Discovery was designed to prevent a situation where one side doesn’t learn of the other side’s evidence or witnesses until the trial, at which point there’s no time to obtain responding evidence. To put it simply, discovery levels the playing field by making all information relevant to the case available to both sides. The hope is that when parties have access to the same information, the outcome of the case will be decided based on the merits of the case rather than which party has the most information.

TYPES OF DISCOVERY. There are four basic methods of discovery:

(1) Interrogatories. Interrogatories consist of written questions that one party sends to another party to answer. Some states limit the number of questions that can be asked. These questions, if not objected to, must be answered fully under oath. If a party receives new information that changes one of their answers, they’re obligated to re-submit their answer with the new information.

(2) Requests for Production. If a party requests a document (rather than an answer), it’s called a Request for Production. Common examples in personal injury cases include requests for medical records and photographs of vehicle damage. Most lawyers submit Requests for Production along with interrogatories and call the entire document “Interrogatories and Requests for Production.”

(3) Requests for Admissions. Although the Washington Supreme Court has said that Requests for Admissions are not technically "discovery requests," they are when one party asks the other party to admit certain facts under oath in order to make the trial go faster in order to get certain agreed-upon facts out of the way. These are similar to interrogatories, but the recipient must simply “admit” or “deny” each question. For example, a plaintiff might ask a defendant, “Admit that you were driving a 2017 Toyota Tacoma on northbound I-5 on January 23, 2021.”

(4) Depositions. Depositions are opportunities for the parties to question each other and witnesses orally and under oath. Depositions take place in the presence of a court reporter who produces a written transcript of the testimony for all parties involved. The goal of most depositions is to extract information to help the deposing party develop a trial strategy, support their legal argument, and obtain statements that can discredit trial testimony if that testimony varies from the testimony taken during the deposition. They are also a good opportunity to evaluate how a witness will perform at trial.

IS EVERYTHING DISCOVERABLE? In general, parties can obtain discovery regarding any matter that can "lead to the discovery of admissible evidence" and is not privileged.

To be discoverable, a piece of evidence doesn’t have to be admissible in court. Rather, it must be “reasonably calculated to lead to the discovery of admissible evidence.” For example, maybe a party’s tax returns wouldn’t be admissible in a personal injury case (because they’re not relevant). But, so long as the tax returns contain information that could lead to another piece of evidence that is admissible, those tax returns are discoverable.

Discovery doesn’t extend to privileged information. The four most common privileges are:

(1) Attorney-client privilege. Confidential communications made by clients to their lawyers (and their staff) in the course of their professional relationship are privileged and need not be turned over to the other side.

(2) Work-product doctrine. Materials prepared by a lawyer in preparation of litigation that contain their impressions, conclusions, opinions, or legal research (such as notes from client meetings) are privileged and therefore don’t need to be turned over to the other side.

(3) Marital privilege. In most states, confidential communications between spouses are privileged.

(4) Physician-patient privilege. Confidential communications from a patient to a doctor made in the course of medical consultation or treatment are privileged in some states. However, this privilege is generally waived if the plaintiff files a personal injury lawsuit concerning the injuries discussed.

DO I NEED A LAWYER? You don’t need a lawyer to conduct discovery. However, if you participate in discovery, you must follow the state’s discovery rules. These rules explain what can be discovered and how it can be discovered. Unfortunately, these rules are incredibly complex and if you fail to follow them exactly, the other party will object to your requests. What’s more, if a defendant objects to a valid discovery request, there’s a whole process that the plaintiff has to go through to get the discoverable information (including initiating a CR 26(i)/LR 37(e) conference and filing a motion to compel). As such, if you’re not represented by a lawyer, a defendant may object to your valid requests in the hopes that you don’t have the knowledge or resources to compel them to answer the requests.

If you've been injured in an auto collision or other incident and/or are involved in a personal injury lawsuit, give us a call at 253.858.5434 to see how we can be of service.

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.