Pros and Cons of Using a Transfer on Death Deed (TODD) to Convey Real Estate Outside of Probate

A Transfer on Death Deed (“TODD”) is a great alternative to transfer Washington real estate and avoid probate. It works equally as well for any Washington property owner, whether a U.S. Citizen, U.S. Tax Resident, or Canadian Non-U.S. Resident.

In 2014, Washington authorized a new way to convey real estate outside of probate. The TODD allows a property owner upon death to transfer their interest in real estate to one or more designated beneficiaries. In order to become effective, however, the TODD must be recorded during the life of the property owner at the County Auditor’s Office where the property is located.

PROS

1. A property owner may name more than one person as a beneficiary. A property owner may even name a contingent beneficiary or class of beneficiaries who receive the real estate if the original beneficiary dies. This alternative may make sense if the property owner believes all the beneficiaries will share equally in the management, care, and expense as future owners of the real estate.

2. Non-Taxable with the IRS until death (and upon death only if subject to federal estate tax).

3. Exempt from Washington State Real Estate Excise Tax.

4. The property owner retains full control and power over the real estate until death. Therefore, the property owner may sell, lease, or otherwise use the real estate. The beneficiaries have no right in the real estate until the owner’s death.

5. Fully revocable if the property owner changes their mind upon recording a revocation at the County Auditor’s office.

6. Merely record the Death Certificate to effectuate the transfer and perfect title in the beneficiary) subject to estate tax compliance, if any.

7. The beneficiary gets a stepped-up basis for capital gains tax purposes, meaning that they assume the fair market value of the real estate at the date of death for future taxable events. Usually, a stepped-up basis is higher in value than the original cost basis in the property. A higher value should help reduce the amount of the capital gain in the event of a future sale.

CONS

1. As the TODD must be recorded at the County Auditor’s Office in order to become effective it also becomes a public record. Therefore, it is possible for a disgruntled family member to discover the TODD if they search the county records where the real estate is located. This situation may be awkward if the disgruntled family member is not a designated beneficiary in the TODD.

2. The TODD may be subject to challenge by an aggrieved heir who may not be a beneficiary.

3. The real estate is subject to possible creditor claims.

4. Not recommended for minor beneficiaries.

The above list is not exhaustive. There are other pros and cons. It is best to coordinate the TODD with the rest of your estate plan to avoid any conflict. Further, other nonprobate methods may also be considered, including a Community Property Survivorship Agreement, Revocable Living Trust, joint tenancy with rights of survivorship (JTWROS), and or other probate avoidance tools and techniques.

With any of the above nonprobate alternatives there may be federal or state estate tax reporting obligations. A tax return may have to be filed. And it may be necessary to obtain a transfer clearance certificate from the IRS or the Washington State Department of Revenue upon death prior to transferring the real estate.

Want more information? Give us a call at 253.858.5434 to set up an appointment today.

There is more to include in your estate plan than just a Will or Trust Agreement to make sure your assets are transferred seamlessly to your heirs upon your death.

Many people believe that having an estate plan simply means drafting a Will or a Trust Agreement. However, there is much more to include in your estate plan to make certain all of your assets are transferred seamlessly to your heirs upon your death. A successful estate plan also includes provisions allowing your family members to access or control your assets, should you become unable to do so yourself.

Most estate plans should include:

* A Will (including guardianship nominations for minor children) and/or Revocable Living Trust

* A Durable Power of Attorney

* Beneficiary designations on nonprobate assets

* A Healthcare Power of Attorney

* A Directive to Physicians (also called a "Living Will")

In addition to these items, a well-thought out estate plan also should consider the purchase of insurance products such as long-term care insurance to cover old age, a lifetime annuity to generate some level of income until death, and life insurance to pass money to beneficiaries without the need for probate.

WILLS AND TRUSTS. A Will or a Trust may sound complicated or expensive -- something only rich people have. That is an incorrect assessment. A Will or Trust should be one of the main components of every estate plan, even if you don't have substantial assets. Wills ensure property is distributed according to an individual's wishes. Some trusts help limit estate taxes or legal challenges. However, simply having a Will or Trust isn't enough. The wording of the document is critically important.

A Will or Trust should be written in a manner consistent with how you've given the nonprobate assets that pass outside of the Will. For example, suppose you've already named your sister as a beneficiary on a retirement account or insurance policy (assets that typically pass outside of a Will to a named beneficiary). In that case, you don't want to give the same asset to a second cousin in the Will because it could lead to a Will contest. Not to mention that both individuals could become bitter toward each other (and you) during a legal battle.

Always name a guardian and a backup guardian for your minor children in your Will. If you do not name a guardian, the court may decide to place your young children with a family member (not of your choice) or even put them in the state's custody.

DURABLE POWERS OF ATTORNEY. It's essential to draft a Durable Power of Attorney (DPOA), so an agent or a person you assign will act on your behalf when you cannot do so yourself. Absent a DPOA, a court may be left to decide what happens to your assets if you are found to be mentally incompetent, and the court's decision may not be what you wanted.

This document can give your agent the power to buy and sell real estate, enter into financial transactions, and make other legal decisions as if they were you. This type of DPOA is revocable by the principal at a time of their choosing, typically when the principal is deemed to be physically able, mentally competent, or upon death.

In many families, it makes sense for spouses to set up reciprocal DPOAs. However, it might make more sense in some cases to have another family member, friend, or a trusted advisor who is more financially savvy act as the agent.

BENEFICIARY DESIGNATIONS. As noted earlier, a number of your assets can pass to your heirs without being dictated in the Will (e.g., 401(k) plan assets). This is why it is important to maintain a beneficiary — and a contingent beneficiary — on such an account. Insurance plans should contain a beneficiary and a contingent beneficiary as well because they might also pass outside of a Will.

Named beneficiaries should be over the age of majority and mentally competent. If they aren't, a court may end up getting involved in the matter.

HEALTHCARE POWER OF ATTORNEY. A Healthcare Power of Attorney (HCPOA) designates another individual (typically a spouse or family member) to make important healthcare decisions on your behalf in the event of incapacity. If you are considering executing such a document, you should pick someone you trust, who shares your views, and who would likely recommend a course of action you would agree with. After all, this person could literally have your life in their hands. A backup agent should also be identified if your initial pick is unavailable or unable to act at the time needed.

DO I NEED AN ESTATE PLAN? If you own a house and/or have kids, you should have an estate plan. Estate planning can be done no matter what your financial status as it includes important information like naming guardians for your underage children and ensuring your assets go to your named beneficiaries.

WHAT HAPPENS IF I DIE WITHOUT A WILL? If you die without a Will, state law will determine who will inherit your possessions and assets.

THE BOTTOM LINE. A Will is a great place to start, but it's only the beginning. There is more to estate planning than deciding how to divvy up your assets when you die. It's also about making certain your family members and other beneficiaries are provided for and have access to your assets upon your temporary or permanent incapacity.

If you have estate planning questions or are interested in talking about making a Will, Durable Power of Attorney, or other documents, give us a call at 253.858.5434 to set up an appointment today. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.

"Testamentary capacity" is required to execute a valid Will. So what is "testamentary capacity"?

Testamentary capacity is another way of describing the soundness of mind required of a “testator,” which is the term for a person who executes a Will. Testamentary capacity is a requirement to execute a valid Will in Washington. In Washington, testamentary capacity can be considered met when the following occurs:

"[A] person is possessed of testamentary capacity if at the time he assumes to execute a will he (or she) has sound mind and memory to understand the transaction in which that person is then engaged, to comprehend generally the nature and extent of the property which constitutes his estate and of which he is contemplating disposition to recollect the objects of his bounty."

If “lack of capacity” is used as the basis for a contest to a Will, the court would look at evidence of the testator’s mental or physical condition. Then they may examine the physical condition of the testator’s Will itself, as well as a testator’s activity to ascertain whether or not this individual had sufficient capacity at the time they executed the Will. These factors and the evidence being reviewed to evaluate them would be highly subjective when any person whose mental or physical capacity is being questioned.

Testamentary capacity can change from one day to the next.

Let’s say that, for example, an older person with dementia is currently having a “great day” and is demonstrating that they have a clear mind and good memory. In this circumstance, the court could find that this individual had sufficient testamentary capacity – though this would often only be done after careful consideration of all circumstances surrounding the case. Further, any person who has demonstrated some form of impairment to their speech or thought process (or other physical condition) can still possess sufficient capacity to execute a Will effectively.

The requirements to sign a Durable Power of Attorney differ from the requirements for testamentary capacity. Therefore, a person may be capable of signing a Will even if he or she cannot sign a Durable Power of Attorney.

If you find yourself having more questions than answers about testamentary capacity, we would be happy to walk your family through the ins and outs of testamentary capacity and how it could affect your estate plans. Please contact our office at 253.858.5434 to set up a confidential consultation today.

When someone dies without a Will, it can lead to a lot of fighting and arguing among the survivors, and it can also lead to a legal battle. It's important to make a Will before you die.

When a loved one dies, it can be a trying time emotionally for everyone involved. Often times after death, it can also be stressful to figure out the distribution of the deceased person’s assets, property, and belongings. When a person dies without a Will, it can lead to a lot of fighting and arguing among the survivors, and it can also lead to a legal battle. It is extremely important to make a Will before you die if you want your assets distributed a certain way. You should seek the advice of an experienced lawyer to help you prepare your Will and make your asset distribution less stressful for your survivors.

TESTATE OR INTESTATE? When it comes to Wills, there are two words that you may hear a lot: testate and intestate. These two words are used to described people and whether they have a Will or not. If you do have a Will at the time of your passing, then you died testate. If you do not have a Will when you die, then you have died intestate. When you die testate, it makes it much easier for your family and friends to determine what you wanted done with all of your assets, property, possessions, and everything else. If you happened to die intestate, then state law determines what happens to your property, assets, etc.

THE PROBATE PROCESS. In Washington, whether you left a Will or not, and absent the use of some probate avoidance technique like a Revocable Living Trust, the loved ones you have left behind will have to go through the probate process. The probate process can be complex and it is best that you hire a lawyer if you ever have to go through it. The court will need to appoint someone to serve as Personal Representative (formerly called an "Executor") of your estate, and then your property, possessions, and assets will all be distributed based on your Will (if you left one) or according to state law (if you didn't leave a Will). If you didn't leave a Will, the way everything gets distributed and dealt with may be vastly different from what you want, so if you can, make sure to sign a Will.

THE PERSONAL REPRESENTATIVE. When you make the decision to move forward on making a Will, you decide who gets your possessions, assets, and property when you die. The Personal Representative is who you appoint in your Will to carry out the Will’s instructions and organize your estate. It is important to appoint someone you trust, and someone who is responsible and has the ability to carry out the Will’s instructions as you wish. If you die intestate, you leave it up to the court to decide who the Personal Representative of your estate is, and it could be someone who you do not approve of. As long as what is proscribed in your Will is legal, your wishes and asset distribution will be carried out.

We are experienced lawyers who will guide you through the estate planning process and make sure you have your affairs exactly how you want them. We will help you develop a Will that will put your mind at ease. Call us 253.858.5434 today.

Have you prepared an estate plan yet? Estate planning can be a hard topic to bring up, but making sure your affairs are in order is a responsible step for any parent to take.

Have you gotten around to preparing an estate plan yet? It’s best not to wait. If you are a parent or guardian to minor children, you already know that taking care of them is the biggest priority of your life. Whether you’re still in the diaper years with your little ones or your kids are getting braces or learning to drive, there’s a lot that goes into making sure your children are well taken care of.

From college funds or savings accounts to the hopes and dreams you have for their lives -- chances are you’ve given plenty of thought to your child’s future. Planning for the future is part of being a parent. That can mean having a well-prepared estate plan too.

Estate planning can be a difficult topic to bring up to your loved ones, and no one ever wants to assume the worst might happen, but making sure that your affairs are in order is a responsible step for any parent to take.

WHAT IS ESTATE PLANNING? Estate planning can sound very formal and like it’s a formidable task, but it can actually be really simple. Estate planning is the process of setting things to be managed or handled according to your wishes, once you are no longer able to do so. Estate planning documents can cover things like who will make your medical and financial decisions if you’re not able to, and what will happen to your home, bank accounts, and valuable or sentimental belongings in the event of your death.

ESTATE PLANNING AS A PARENT. Just as your life changed when you became mom or dad, your estate planning needs will change when you have children. Though many parents don’t pass on until their children are well into adulthood, there are unfortunate instances when one or both parents die leaving minor children behind. This – maybe more than any other circumstance – is when estate planning is most necessary.

By law, children under the age of 18 cannot make decisions about things like legal contacts and documents, nor can they make legal decisions relating to material or non-material property (real estate, bank accounts, other assets, debts, and inheritance matters). Creating a Will and/or a Trust with minor children involved will bring an additional set of requirements to the table. But with our legal advice, your questions can be answered and a customized estate plan can be created for you and your children that fits your family's situation.

THINGS TO CONSIDER. Every family is unique and each family situation comes with special considerations that will be included in the estate planning process. Some things you may want to think about or talk with your spouse about as you start thinking about your estate plan are:

* Power of Attorney – If you become ill or incapacitated and cannot make your own medical and financial decisions, the person you give power of attorney to will be able to step in and make those decisions for you. A Power of Attorney may be needed temporarily (for example, if a person is temporarily unconscious but later regains consciousness) or at an end-of-life stage. A medical power of attorney gives someone the ability to make your medical decisions, and a financial power of attorney allows them to manage your financial affairs. In Washington, a Power of Attorney can also be given to make health care decisions for your minor child if both parents are incapacitated or otherwise unavailable.

* Potential guardians – Think about who in your child’s life would be able and willing to become their physical and legal guardian. Many times, this person will be a close family member such as a grandparent, an aunt or uncle, or maybe an older sibling, but may also be a friend, step-parent or other person you entrust to care for your child.

* Individual family factors -- The age of your children, age of potential guardians, and many other considerations may factor into your decision. For example, if your children are school aged, would staying in the area be preferable or would moving to another state be the better option? If you have very young children, would the age of a relative affect the care they may need? And, if your child has special needs or health concerns, would the guardian be able to provide the level of care your child would need?

* A Personal Representative – This person will make decisions related to the real estate, personal property, and financial assets that make up your estate. The Personal Representative may be the same person you’ve appointed as guardian, or it may be another person. A Personal Representative will manage the assets of an estate and distribute them to the beneficiaries.

* Assets -- You’ll want to make note of any and all assets you have that you will be leaving to your beneficiaries. Determining how you want things to be handled beforehand can keep things orderly and amicable when it comes time to settle any debts and divide your assets.

* Inheritance ages – If your minor children will be the main beneficiaries of your estate, they can’t officially inherit until they are 18. If there is a large amount of money or other property involved, sometimes the age of inheritance will be delayed or staggered, with the child receiving some or all of their inheritance at – for example -- 21, 25, 30, or later.

MAKING A WILL. Once you have all of your information ready, you’ll want to make a Will. In the Will, you will appoint the Guardian for your minor children, Personal Representative of your estate, Trustee of any Trusts you may create for your kids, and state your wishes for your assets. There may also be state-specific tax and inheritance laws you’ll want to consider when creating a Will.

CREATING A TRUST. Assets may be given directly to beneficiaries or they may be placed into a Trust. There are different types of Trusts you may want to use to hold real estate, money and stocks, or other inheritance for your children. Trusts such as a Spendthrift Trust or a Special Needs Trust can be created for minor children, as can a Family Pot Trust. These types of Trusts allow for medical and education expenses to be paid for the child out of the Trust.

Your family is unlike any other and your estate plan should be customized to fit its needs. We can help you get started on your estate plan. Contact us today at 253.858.5434 to learn more about how we can help.

Handling Creditors' Claims in Probate, Providing Notice to Creditors, Responding to Claims, and Negotiating with Creditors

If you’re the Personal Representative of an estate in a probate matter, you should know that death does not automatically eliminate the decedent’s debts. If you want to understand how to handle creditors in probate, you must learn how to properly provide notice to creditors, respond to creditors' claims, and negotiate with creditors.

COMMON ESTATE CREDITORS. Common estate creditors include the government (the IRS, the Washington State Dept. of Revenue, and the Washington State Dept. of Social and Health Services) and both secured and unsecured debt.

Secured debts are attached to collateral which the lender can seize, sell, and use to pay back the debt if the borrower defaults on payments. Real estate mortgages and car loans are examples of secured debt.

Unsecured debt lacks collateral, like credit card debt and student loan debt. Unsecured debt is a lower priority creditor in an estate administration.

REQUIREMENTS FOR CREDITORS TO MAKE A CLAIM. Under the Uniform Probate Code, creditors must file a claim within the latter of:

(1) Four months after the first date of publication of the Probate Notice to Creditors in a legal newspaper; or

(2) 30 days of the creditor receiving an actual copy of the Probate Notice to Creditors in the mail.

In order for their claim to be valid, the creditor must file the claim with the Court and serve a copy of the claim on the Personal Representative.

HOW TO RESPOND TO CREDITORS' CLAIMS. Certain smaller claims are deemed accepted if the PR takes no action at all. The PR must respond to all other claims in writing. You can allow or reject the claim in whole or in part. You must file the allowance or rejection with the court and send a notice to the creditor with a copy of the allowance or rejection.

Note that if the PR does not have nonintervention powers, the court will have to approve or reject creditor claims.

Rejection of a Creditor's Claim can be contested, but the burden of proof falls to the contestant.

NEGOTIATING WITH ESTATE CREDITORS. If the estate has funds to pay the debts and creditors have filed a claim, you may wish to negotiate the debts to preserve the maximum amount for the heirs or beneficiaries. The first step to negotiating with creditors is to verify that the debt is authentic. Not all apparent debts are equally valid. Confirm that the supposed claim wasn’t previously paid by the decedent before their death. Sometimes companies don’t keep perfectly accurate records. Fraud does happen occasionally when false claims are made, so be careful to ensure that all claims are accurate.

Next, prepare a settlement offer. Contact the creditor and present the settlement offer as Personal Representative of the estate. Once you reach an agreement, get the settlement agreement in writing.

Once received, send the payment via certified mail along with a copy of the written agreement and a Receipt and Release for the creditor to sign and for you to file with the Court. Remember to request a return receipt so you have proof of delivery. Keep a copy of the payment and settlement for your records in case the creditor or a collection agency claims the debt was never paid.

INVOLVENT ESTATES. If the estate’s debts are greater than its assets, it is said to be “insolvent." If insolvent, not all debtors are going to be paid back in full. Where an estate is insolvent that court requires that all creditors who have filed a valid claim will get paid under a pro-rata division of the estate assets.

There are many factors to consider when handling creditors in a probate matter. If you’re the Personal Representative of an estate with significant debts, you may wish to consider hiring an experienced lawyer. They can help you observe all deadlines, meet the legal requirements, and negotiate with creditors. If you need help handling creditors in a probate, feel free to contact our office at 253.858.5434 to set up an appointment today.

Personal injury settlement amounts vary widely, and a case's value depends on many factors unique to the specific facts of the case.

Personal injury settlement amounts vary widely, and a case’s value depends on many factors unique to the specific facts of the case. People hear about jury verdicts reaching into the millions, but these are very rare cases that attract a lot of attention because they’re extraordinary. The truth is that a large majority of cases settle well before a trial, so the parties don’t have to endure long, arduous, and unpredictable jury trials.

We have extensive experience securing significant injury awards for injury victims. We provide clients with the information they need to make informed decisions about their cases. We handle all aspects of personal injury claims, including insurance negotiations, settlement agreements, litigation, and appeals. With our help, you can pursue a claim to hold the party responsible for your injuries legally accountable.

FACTORS AFFECTING YOUR PERSONAL INJURY SETTLEMENT VALUE. A number of factors affect the amount a victim obtains from a personal injury settlement, not the least of which is the extent of damages and injuries. After an auto collision, a victim’s goal usually includes getting back to their regular life. The purpose of compensation is to put victims in the same position they were in before the collision, or as close to it as possible. Determining that amount relies on quantifying a victim’s economic and non-economic damages.

ECONOMIC DAMAGES. Economic damages refer to the quantifiable monetary losses the victim incurred. These damages include direct expenses such as the victim’s:

* Medical treatment costs;

* Lost wages and benefits; and

* Property damage.

Medical expenses can include the cost of their onsite treatment, airlift or ground transportation to a hospital, and emergency treatment. Additionally, injury victims should be compensated for any rehabilitation or future medical treatment they need. However, insurance companies are often hesitant to include this compensation without compelling evidence.

The victim’s lost wages can be harder to calculate. In addition to missed work, the victim may experience lower productivity or even be unable to perform the job they had before the collision. An experienced lawyer can assist victims in maximizing their economic damages.

NON-ECONOMIC DAMAGES. After a severe auto collision, a person’s most tremendous losses may have nothing to do with direct financial costs. Non-economic damages refer to a host of losses that fall under the umbrella of “general damages.” These intangible losses include pain and suffering, mental anguish, humiliation, loss of enjoyment of life, disability, disfigurement, inconvenience, and more. Proving non-economic damages is critical to a full and fair recovery. However, these damages require you to tell a compelling story about how the incident impacted your life.

PUNITIVE DAMAGES.

Unlike other states, like Idaho, Washington does not permit punitive damages. Punitive damages are designed to punish the at-fault party for their conduct. However, Washington’s Supreme Court has explained that these damages are only authorized by statute. While Washington law prohibits punitive damages, a skilled attorney can help victims secure a settlement agreement that fully compensates them for their injuries.

CALCULATING DAMAGES AND SETTLEMENT AMOUNTS. Determining the value of a settlement requires examining the components of the case. The total value involves the sum of economic and non-economic damages. Calculating economic damages is typically straightforward because you simply have to gather all receipts, invoices, and pay stubs and add everything up. However, non-economic damage is calculated differently.

The multiplier method is a common way to calculate less tangible, non-economic losses. To calculate damages under this method, an attorney may add up a victim’s economic damages and apply a multiplier to arrive at an approximate settlement value. The multipliers range from 1 to 5, depending on the severity of the injuries.

Some circumstances warrant a higher multiplier. These include collisions resulting in broken bones, traumatic brain injuries, and spinal cord damage. Further, injuries requiring significant follow-up or costly specialists may increase the multiplier. On the other hand, a multiplier may be lower in cases where there are only connective tissue injuries that were treated with chiropractic and massage and possibly physical therapy, no medication, no visible scars, or expenses for diagnosis rather than treatment.

In addition to the multiplier method, a settlement amount may depend on the effect of the injury on the particular victim. For example, a young teenager who suffers a scar on their face may experience more pain and suffering than another victim. Other considerations may impact a settlement claim. These factors include witness credibility, medical records, whether the injury victim actively participated in their treatment, pre-existing conditions, and the at-fault party’s admissions.

HOW A LAWYER CAN HELP VALUE A CLAIM. Only you know the true impact that an injury had on your life. However, a skilled lawyer can help you reach an agreement with the insurance company that fairly compensates you for what you’ve been through. For example, lawyers understand what motivates an insurance company to offer a fair settlement figure. The stronger the case you can present, the more likely the insurance company will fear losing at trial. This is the primary motivation for the insurance company to settle the case. A skilled lawyer can evaluate your case, gather compelling evidence, and present a strong case to the insurance company.

Although some injury victims choose to settle a case without a lawyer, those who place too low or too high a value on a case may find themselves at a disadvantage. Underestimating your damages leaves money on the table and placing too high a value on your claim may make settlement impossible. An experienced lawyer can help you come up with a fair settlement amount that is supported by the evidence.

If you’ve been injured in an auto collision and want to learn more about how to determine the settlement value of your claim, contact us at 253.858.5434. We offer all prospective clients a free consultation, during which we explain the process in clear, understandable terms. To learn more and to schedule a free consultation today, reach out to us today. Calling is free, and we will not bill you for our services unless we recover compensation on your behalf.

A Durable Power of Attorney allows you to appoint someone to act in your place for financial purposes if and when you ever become incapacitated.

For a lot of people, the Durable Power of Attorney is the most important estate planning instrument available -- even more useful than a Will. A Power of Attorney allows a person you appoint someone (your "attorney-in-fact" or “agent”) to act in place of you (the “principal”) for financial purposes when and if you ever become incapacitated.

In that case, the person you choose will be able to step in and take care of your financial affairs. Without a DPOA, no one can represent you unless a court appoints a conservator or guardian. That court process takes time, costs money, and the judge may not choose the person you would prefer. In addition, under a guardianship or conservatorship, your representative may have to seek court permission to take planning steps that they could implement immediately under a simple Durable Power of Attorney.

A Power of Attorney may be limited or general. A Limited Power of Attorney may give someone the right to sign a deed to property on a day when you are out of town. Or it may allow someone to sign checks for you. A General Power of Attorney is comprehensive and gives your attorney-in-fact all the powers and rights that you have yourself.

A Power of Attorney may also be either effective immediately or "springing." Most Powers of Attorney take effect immediately upon their execution, even if the understanding is that they will not be used until and unless the grantor becomes incapacitated. However, the document can also be written so that it does not become effective until such incapacity occurs. In such cases, it is very important that the standard for determining incapacity and triggering the Power of Attorney be clearly laid out in the document itself, e.g., written certification by two treating physicians the principal is incapacitated.

However, we have noticed that clients are experiencing increasing difficulty in getting banks or other financial institutions to recognize the authority of an agent under a Durable Power of Attorney. A certain amount of caution on the part of financial institutions is understandable. When someone steps forward claiming to represent the account holder, the financial institution wants to verify that the attorney-in-fact indeed has the authority to act for the principal. Still, some institutions go overboard, for example requiring that the attorney-in-fact indemnify them against any loss. Many banks or other financial institutions have their own standard power of attorney forms. To avoid problems, you may want to execute such forms offered by the institutions with which you have accounts.

While you should seriously consider executing a Durable Power of Attorney, if you do not have someone you trust to appoint it may be more appropriate to have the court looking over the shoulder of the person who is handling your affairs through a guardianship or conservatorship. In that case, you may execute a Limited Durable Power of Attorney simply nominating the person you want to serve as your conservator or guardian. Most states require the court to respect your nomination "except for good cause or disqualification."

If you have questions about Powers of Attorney or other estate planning documents, give us a call at 253.858.5434 to set up an appointment today.

Placing assets in joint tenancy with rights of survivorship might be convenient and appropriate for some families, but there are some pitfalls to joint ownership as well.

Parents are often tempted to place their property in joint tenancy with one or more of their children. Because the child becomes a co-owner of the asset, the child can have easy access to the account to help the parent pay bills and manage the asset. Further, at the parent’s death, the asset automatically passes outright to the child. While this type of ownership might be convenient and the appropriate way to go for some families, it is essential to realize the potential pitfalls that come with joint ownership. Sometimes convenience comes at a high price.

WHAT IS JOINT TENANCY? First, let’s have a precise definition. Joint tenancy or "Joint Tenants with a Right of Survivorship" is a form of ownership. In this ownership, two or more persons own property, such as real estate or a stock account. During these owner’s lifetimes, they each own 100% of the asset, so that when one joint owner dies, the survivor still retains their 100% ownership interest.

THE DOWNSIDE. Putting your child’s name on your asset as joint tenant makes them a co-owner. As a result, you open the asset up to avoidable attacks and potential family conflicts. Let me give you a list of potential pitfalls of making your child a joint tenant with a right of survivorship:

* Matter of Convenience vs. Intent to Make a Gift: Much litigation arises from placing accounts in joint tenancy. The problem comes when the parent dies and the child who is joint tenant exercises the ability to claim the account. The child refuses to share with the other children. Meanwhile, the other children say the joint tenancy was merely for convenience. The other children say the parent wanted the asset divided equally, not to pass only to the one child.

Who is right? Only the dead parent knows, and the parent is no longer around to tell us the answer. Now the matter ends up in court. A judge listens to both sides. The judge then decides if the deceased parent created the joint tenancy for convenience or as a method to get the surviving joint tenant all the assets at death. This litigation is expensive and tears the family apart.

* Child’s Creditors: Making the child a joint tenant gives the child ownership rights. The child’s rights are now equal to the parent’s. While the child can now help with writing checks or making investments, the child’s creditors can now claim against the account for unpaid debts. The problem only gets worse if the child should ever file for bankruptcy.

* Child’s Access: Because the child is a co-owner, the child has complete access to financial accounts. We don’t like to think about it, but sometimes children can have problems. You've heard stories. Children empty a parent’s accounts because of mental health problems, gambling, and debts. Because you gave the child complete access to your account as co-owner, the child could spend all the money. You will have no recourse against the bank.

* Child’s Spouse: By giving the child account ownership, if the child divorces their spouse, the jointly held property could end up being drawn into the divorce litigation. The unexpected result is causing the parent unexpected expense and stress. Instead, the smart parent sets up protective Trusts protecting the inheritance from a child’s ex spouse.

* Thwarting the Will: The parents may have a well-drafted Will created by an experienced estate planning lawyer. The Will might create Trusts for the child to help shelter the parent’s gift to the child at death from the child’s creditors and spouse. By putting the asset into joint tenancy, this property instead passes directly to the child outside of the Trust, thwarting a well-crafted estate plan.

ALTERNATIVES TO JOINT TENANCY. Rather than using a joint tenancy, other options might address your goals while precluding the problems and pitfalls associated with a joint tenancy.

* Powers of Attorney. Rather than using joint tenancy with a right of survivorship, your lawyer can craft a power of attorney. This power of attorney gives the child the potential to assist the parent with the property. Most of these will be general powers of attorneys, granting the child broad powers to address a broad spectrum of matters. You could also have your lawyer prepare a special power of attorney with very narrow terms addressing only one issue, e.g., writing checks on one of your checking accounts. Most financial institutions also have preapproved special powers of attorney, crafted to apply only to that institution’s accounts.

A power of attorney makes your child your agent, but as an agent, your child’s spouse and creditors have no controls over your accounts. Should your child get divorced or file for bankruptcy, a power of attorney gives their spouse and creditors no authority to access your assets.

* Revocable Living Trust. Revocable Living Trusts are trusts created during your life into which you place your property. Generally, they are designed to avoid probate, but can also help a parent in need of a child’s assistance. The child can be made a co-trustee along with the parent. Thus, the parent maintains control, but the child can step in to help. Because the assets are owned by the parent’s Trust, not by the child as a joint owner, the child’s creditors and spouse have no claim to trust assets.

While joint tenancy with a right of survivorship is a valuable tool for estate planning, use this power wisely. Recognize potential complications. Developing an estate plan requires that your lawyer understand how you own all your property. Only then can your plan avoid being unexpectedly thwarted outside of the Will.

If you have more questions about Wills and estate planning, let us help walk you through the confusing process. We are ready to answer your questions. Feel free to contact our office at 253.858.5434 to set up an appointment today.

Sustaining an injury as a result of someone else's negligent actions can negatively impact your life in many ways. We can help you pursue fair and just compensation.

Sustaining an injury as a result of someone else’s negligent or reckless actions can negatively impact your life in many ways. Suddenly, you’re focusing on making a physical recovery while costly medical bills start to accumulate. Your injuries may be severe enough to prevent you from working, resulting in a loss of wages or income. Fortunately, Washington allows you to pursue compensation for these injuries by filing a personal injury claim. In most cases, a settlement is reached through a series of negotiations.

FIRST STEPS TO TAKE FOLLOWING AN AUTO COLLISION. It’s critical that you refrain from admitting fault or even discussing the incident with the other involved parties at the scene. While you’ll need to exchange important contact and insurance information, do not talk about the collision itself. It’s a good idea to contact the police so that an incident report can be created, which will provide an impartial account of the crash. Then, contact your insurance company to inform them of the collision. The sooner you contact them, the more time they will have to investigate.

WORKING WITH YOUR INSURANCE COMPANY. Washington drivers are required by law to carry a basic amount of insurance. When you sign a policy with an insurance company, you agree to inform them of any collisions and to cooperate in the subsequent investigation and processing of claims. If you fail to uphold your obligation, you could face higher premiums, policies that cannot be renewed, or even the cancellation of your policy. It’s also important to notify your insurance company right away so that you can tell your side of the story. If the other driver decides to take legal action against you, it’s best to have a record of your version of the events and to have given your insurance company ample time to investigate.

NEGOTIATING A SETTLEMENT. The sooner you reach out to an experienced lawyer following the collision, the more prepared you’ll be to successfully navigate the claims process. Your lawyer will help you understand your options for pursuing compensation from your insurance company, the other driver’s insurance company, or from the at-fault driver. For the most part, insurance companies strive to avoid going to court. They are usually willing to negotiate a fair settlement before a lawsuit is filed. However, it may take a bit of back-and-forth discussions between your lawyer and the other party before a settlement is reached. For instance, your lawyer may draft a demand letter requesting a specific amount, and the other party may reply with a lower offer. You’ll then go from there until you reach an amount that you find acceptable. In some cases, the other party may not cooperate, and you and your lawyer can decide whether to take your case to court.

If you or a family member have been injured in an auto collision through no fault of your own, give us a call at 253.858.5434 to set up an appointment for a free initial consultation today.

In the next 30 years, about $40 trillion will pass from the Baby Boomers to Gen X'ers and Millennials. We counsel clients on long-term multi-generational estate planning.

In the next 30 years, approximately $40 trillion will pass from the baby boomers to Gen X'ers and millennials. Given this sizable transfer of wealth, we as lawyers must be equipped to counsel not only our existing clients, but also our clients’ children, grandchildren, and even parents. This is where multi-generational estate planning comes into play.

Identifying estate planning and wealth transfer planning opportunities goes beyond the basics and into clients’ long-term goals with regard to their families.

It helps to create a multifaceted plan that considers:

* Estate planning, including wealth transfer and legacy concerns

* Tax planning

* Charitable goals

* Retirement plan success

* General financial planning (e.g., analysis of the family’s assets, net worth, sources and types of income)

* Business succession planning

As estate planning lawyers doing multi-generational planning, we frequently need to go beyond the basic Wills and other estate planning documents and talk about each client’s wishes, as well as their intentions for the future. We gather a great deal of information, including insight into the client’s family dynamic through a series of simple exchanges and conversations.

In order to get an estate plan started we ask our clients to consider the following:

* What do I want to leave behind?

* How do I want my wealth to affect my children’s lives? My grandchildren’s lives?

* What degree of control do I want after I’m gone?

Some of the common estate planning techniques for transferring assets or wealth to other generations includes some non-conventional methods such as family limited partnerships and other family business entities, complex irrevocable Trusts, and lifetime gifting strategies. We are equipped with the knowledge and experience to recognize the facts that fit a planning opportunity, educate each client on the strategy, and further suggest how a sophisticated money-saving technique or strategy suits a client’s plan.

Helping our clients explain what will happen with the estate to the beneficiaries is an important but somewhat overlooked part of where we add value during the estate planning process. Talking about death and money issues isn't everyone's favorite topic. So having a lawyer help families navigate these waters is extremely beneficial for most families and something that we have found helps put everyone's mind at ease. Many people don't fully understand how money or property gets distributed from a Trust or during the probate process. We can answer some of those questions on the front end and help alleviate any tension or angst among family members.

If you have estate planning questions or want information about transfer your wealth or family business to the younger generations, 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.

Everyone needs an estate plan -- it is a set of legal documents that give you control over what happens to your family and your assets if you become disabled or die.

The birth or adoption of a child, marriage, separation, planning for retirement, pandemic, or vacation away from the kids are some of the reasons people choose to make an estate plan. An estate plan is for everyone – it is a set of legal documents that give you control over what happens to your family and your assets if you become disabled or die. The process will give you peace of mind that you and your loved ones will receive proper care and assistance in the event of your death or incapacity.

Every family and individual can benefit from planning for the disposition of their property using a variety of legal tools, including Wills and Trusts. Families with minor children should have documents in place that appoint a guardian and create a children’s Trust to care for their children’s needs.

But estate planning is not just about what happens to your property upon your death. A health care directive and power of attorney can help you make your wishes regarding end-of-life medical treatment effective and designate trusted people to carry out your financial and health care decisions in the event that you are unable to do so yourself due to incapacity or disability.

An estate plan attempts to eliminate uncertainties in the administration of one’s probate and end-of-life decisions as well as to maximize the value of an estate by reducing taxes and other expenses. An estate plan is an excellent way to put your values into action with charitable intent.

Our goal is to educate you regarding the tools available for estate planning, and to help you put your plan in place. We provide estate planning legal representation on a flat fee basis. Flat fees allow you to know what the cost will be ahead of time. After we've had a chance to meet and discuss your goals, needs, assets, and family circumstances, we will advise you as to which documents we recommend for your plan and you will know at that time exactly how much will pay in legal fees.

If you have estate planning questions or if we can be of service to you, your family, friends, neighbors, or coworkers, 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.

One of the questions we've been asked most often over the years by nonprofit leaders is, "Why should my nonprofit or church hire a lawyer?"

One of the questions that we have been asked most often over the years by nonprofit leaders is, “Why should my nonprofit or church hire a lawyer?" While we are (obviously) biased in our answer, we can confidently elaborate on numerous reasons why a nonprofit should have an active relationship with a lawyer knowledgeable about nonprofit matters.

Far too many nonprofit organizations and churches simply ignore legal issues altogether or at best attempt to rely on a board member who happens to be an attorney (even if that attorney practices in an area wholly unrelated to nonprofit law). Too often, nonprofits and churches forgo reaching out to qualified legal counsel for fear of the cost involved. This inevitably leads to unresolved legal issues that end up costing the organization more time and even more money later on, thus taking away from the organization's overall ability to achieve its mission. Here a just a few reasons why your nonprofit or church should consider hiring a lawyer:

FORMATION. When starting any nonprofit organization, there are a combination of state and federal laws to be followed, many forms that need to be submitted, and several documents that must be drafted, all before your organization is operational. Your new nonprofit may want guidance with filing, understanding categories of tax exemption, creating a corporate purpose statement, drafting a budget, and dealing with the IRS. Applying for tax exempt status with the IRS via Form 1023 is a long and complicated process. A knowledgeable lawyer can make this process smoother and allow the founders to focus on the important tasks of building the organization's programs, fundraising, and staffing.

REORGANIZATION. If your nonprofit or church is considering restructuring or using an alternative entity structure, you may be tempted to do this yourself. After all, creating corporation online is super easy, right? That is certainly true, but a tax exempt organization's use of partnerships, corporations, and LLCs can sometimes create unintended consequences and unforeseen problems. Likewise, mergers, acquisitions, and dissolutions can present surprising complications.

REINSTATEMENT. Most states, including Washington and Idaho, require annual reports to be filed with the state in order to remain in good standing. If your nonprofit has lost its active status, reinstatement is required. This requires paperwork and payment of fees. Similarly, if an organization fails to file its annual Form 990 with the IRS for three consecutive years, that organization's 501(c)(3) status will be automatically revoked. When that occurs, the clock starts ticking and the organization has a relatively narrow window to get its tax exempt status reinstated retroactively.

TAX EXEMPTION. Even once you have obtained tax exempt status, a knowledgeable lawyer can help you maintain that status. Few organizations lose their tax exempt status because of something they intentionally did—quite the opposite, most organizations that lose their status do so because of an unintentional failure to follow the sometimes complex rules and regulations the IRS has in place for tax exempt organizations. Counsel from a competent lawyer can help prevent these inadvertent violations of IRS compliance.

BOARD GOVERNANCE. A nonprofit's Board of Directors or Board of Trustees is tasked by the state and the federal government with the authority and responsibility to oversee and govern the organization, ensuring that its assets are used exclusively to further the organization's tax exempt purposes. This governance responsibility is multi-faceted and is comprised of compliance with laws at both the state and federal level. An experienced lawyer can help the Board navigate these issues, while also serving as a strategic advisor on other non-legal questions facing the Board. A lawyer can also serve as a mediator in times of conflict between Board members or between the Board and the Executive Director.

EMPLOYMENT ISSUES. Perhaps the most significant litigation risk to nonprofits is in the area of employment law. Whether it is compliance with state labor laws or federal antidiscrimination statutes, employment law for nonprofits is a complex web of interrelated laws that are highly dependent upon individual circumstances. From hiring to firing, a knowledgeable lawyer can help nonprofits make appropriate employment decisions that protect the organization and its employees.

DOCUMENT DRAFTING AND REVIEW. Nonprofits of all sizes deal virtually daily with what may be the most common legal issues they face: contracts and other formal documents. Even small organizations have to regularly deal with contracts from internet service providers, independent contractors, or other vendors. These contracts are often poorly written in difficult to understand language, so many nonprofit leaders often sign the documents without an in-depth review. Similarly, when a nonprofit needs to draft some sort of contract, it often resorts to searching the internet for a template. Both of these situations put the organization at a disadvantage and potentially cause an unnecessary expenditure or waste of organizational resources. A lawyer can review contracts presented to the organization and highlight areas of concern as well as areas for potential negotiation, often saving the organization money or shifting some of the liability to the other party. Likewise, a lawyer can draft an accurate contract that best accomplishes the organization's goals.

INTELLECTUAL PROPERTY. Though intellectual property often permeates throughout even small nonprofits, including in logos, websites, music, film, software, graphic design, and more, intellectual property is often one of the most neglected legal issues in the nonprofit sector. Many nonprofit leaders are shocked to learn just how much IP their organization has created, and often even more shocked at some of the default rules that govern that IP, such as the work-for-hire doctrine in copyright law. Establishing a relationship with a lawyer knowledgeable about the peculiar aspects of IP law that apply to nonprofits is a critical step in protecting one of the most important assets a modern nonprofit organization has.

OUTSIDE GENERAL COUNSEL. Finally, nonprofits and churches face all kinds of random legal questions on a regular basis. Having an active relationship with a lawyer allows an organization to effectively handle those questions and ensure the organization's tax exempt purpose is not threatened by the legal issues that arise.

LET US HELP. While having a full-time in-house attorney may not be realistic for your organization, getting the occasional outside counsel from a lawyer is much more realistic than you might think. At our law firm, we focus on the success of nonprofits and their missions. Our experience in the nonprofit sector gives us a unique insight into the challenges you face, and we are committed to assisting nonprofits in a way that is sustainable and approachable for organizations of all sizes. Whether you need legal counsel daily or just have a legal question a few times a year, we can advise you on the law and best practices for nonprofits.

If we can be of service to you, your nonprofit organization, or church, 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.

Estate planning is important for new parents. We recommend that all parents of minor children have a properly executed estate plan in place.

As a new parent, you’re focused on your new baby and with so many things to do, estate planning for new parents is easy to dismiss. You may have already charted the course of your child’s life, but have you considered what could happen if you can’t be there for your child?

New parents may feel uncomfortable at the thought of not being around for their little one or not being able to care for them. Despite the difficulties, don’t put off this essential step in safeguarding your child’s future. We recommend that all parents of minor children have a properly executed estate plan. Estate planning is important for new parents because, without a plan, a judge may step in to make decisions that aren't necessarily what you would want. The right time to think about estate planning, if possible, is now, while you still can.

You may wonder how to set up your estate plan. Whether you choose a Will or a Revocable Living Trust, these tools outline how you want your child (or children) to be cared for and how to distribute your assets upon your death. We can help you consider which documents suit your situation.

Among the issues to think about in your estate planning are:

GUARDIANSHIP – In case something happens to both you and the other parent, you should choose a guardian to raise your child. The guardian will care for and support your child and make all necessary legal, medical, and educational decisions. Ideally, they will have good character and share your values and parenting style.

INHERITANCES – By creating a Trust to hold your child's inheritance, you can control what your child will receive and when. Typically, without a Trust, this will happen when a child turns 18, but you may want to choose a different age when you think your child may be mature and financially responsible enough to handle an inheritance. If you will use a Trust, you can appoint a Trustee — the guardian or another person — to manage your your child's assets while your child is underage.

YOUR AGENT AND ATTORNEY-IN-FACT – A Durable Power of Attorney lets you name who you want to act on your behalf — often in financial matters — in case you become incapable of doing so. Similarly, a Health Care Power of Attorney designates someone to make medical decisions for you if you can’t do so yourself. When you pass away, a Power of Attorney is no longer in effect. But your Personal Representative, if you have a Will, or your Trustee (as outlined in a Revocable Living Trust) will represent you on behalf of your estate.

FUNERAL ARRANGEMENTS – You can specify your final wishes. If you don’t, a court could assign the duty to your next-of-kin.

When you consider a guardian or an agent, the person should be willing, healthy, trustworthy, and capable of handling the responsibility. Talk to your top choices to find out how they feel about taking on these roles before you put your desires in writing.

Once you’ve planned for your estate, you and your family will be on the way to a more secure future.

New parents are often busy. You don’t have to plan for your estate yourself. Let us advise you on the right course to take. To discuss your needs, contact us at253.858.5434 today. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.

When you're looking for a personal injury lawyer, you want to make sure you end up with the right person for you and your case. That expectation works both ways. So what's a "good client"?

When you're looking for a personal injury lawyer, you want to make sure you end up with the right person for you and your case. And that expectation can work both ways. Every lawyer wants a "good client" if at all possible. But what is a "good client," and how much of being a "good client" is actually within the client's control?

In a nutshell, a good client does whatever is necessary in order to ensure that the case goes as smoothly as possible, and that the best outcome (a fair personal injury settlement, or a win in court) can be reached. That means:

1. RESPOND TO YOUR LAWYER. Clients get pretty upset when their lawyer doesn't return phone calls or emails. And lawyers feel the same way. If you don't return your lawyer's phone calls, emails, or letters promptly, you're not just wasting your lawyer's time, you could also be hurting your case.

2. ATTEND ALL MEDICAL APPOINTMENTS. Your health care provider will note any appointment that you miss, and, if you miss too many, the insurer adjuster (or the jury) is going to assume that you must not have been hurt as badly as you claim. This will cost you money. Be sure to keep all of your appointments.

3. COOPERATE IN THE DISCOVERY PROCESS. If you end up filing a personal injury lawsuit, the defendant will send your lawyer written questions called interrogatories, as well as requests for production of documents. Your lawyer will send these on to you. You will need to promptly answer the interrogatories and provide your lawyer with the requested documents, or your case could be dismissed. Help your lawyer and help yourself. Respond to all discovery as quickly as you can.

Practice for your deposition. Your deposition is a very important step in your case. Your lawyer is there to help you prepare, to offer guidance during the proceedings, and even step in if the other side is taking a questionable approach. Follow your lawyer's advice and recommendations.

4. DON'T (ALWAYS) BLAME YOUR LAWYER. Clients who are annoyed that their case isn't going well will often turn on their lawyer and say that it must be the lawyer's fault. Some things are indeed a lawyer's fault, and any client needs to be attuned to that. But some problems that arise in personal injury cases are the client's fault, and other obstacles are no one's fault. Some personal injury cases just aren't that strong (meaning there's little or no chance of reaching a favorable outcome). Don't blame the messenger if your lawyer brings bad news. It's not going to help your case.

For many lawyers, whether they'll admit it or not, the perfect client is one who does what they are told and doesn't hound the lawyer for updates at every turn. But it's not in most clients' best interests to try to live up to that model. There are times that you have to speak up.

If you sincerely believe that there are problems in your case, you can't always be the "good client." You have to ask questions. Remember that it is your case, not your lawyer's. You are the one who was hurt. You have an absolute right to be kept informed about what is going on. It may seem like you are being pesky by asking pointed, probing questions about your case, but you need to protect your interests by staying informed.

If you or a friend, family member, neighbor, or coworker has been injured and needs legal representation, give us a call at 253.858.5434 to schedule a free consultation today.