Will
A good estate plan should do exactly that: Put on paper a game plan for your estate after your death.
A great estate not only accomplishes this game plan, but also offers you control and peace: Peace of mind that you have left a road map for your family to follow after your death; and peace of mind that you have taken steps to minimize potential estate taxes.
Estate taxes are those taxes which can be imposed on your Estate by both the State and Federal governments if the size of your estate is greater than a threshold amount. For the State of Washington, that amount is $2,193,000.00; for the Federal government, that amount is approximately $11.18 million.
The document that puts your estate plan on paper and hopefully minimizes any potential estate taxes is your Last Will and Testament (“your Will”). Your Will only has legal effect upon your death. If you wish for an estate plan to start to take shape during your life, you could choose to use a Living Trust or Revocable Trust. At Ludwick Law Group, we walk you through the differences between a Will and a Trust and help you create a customized estate plan that suits not only your estate planning and financial goals, but also your family dynamic. We do this by having a conversation with you about how to put your estate plan into action:
• Who do you want to manage and wrap up your financial affairs?
• Who do you want to care for your minor children?
• How and when should assets be transferred to heirs?
• Who should oversee this transfer and administration process?
Once we know what you want to accomplish, we can draft the right documents to achieve those goals, ideally with appropriate mechanisms to minimize potential estate taxes.
In short, we help you plan now for later so your family doesn’t have to.
Powers of Attorney
Every person should have in place both a Financial Power of Attorney (“FPOA”) and a Durable Health Care Power of Attorney (“DHCPOA”). These documents allow you, the principal, to appoint another person as your “Agent” or “attorney-in-fact.” Your appointed Agent has the authority to make financial, legal, healthcare, or other decisions for you while you are alive.
These Powers of Attorney can be either “immediate” or “springing.” Both terms refer to when your named Agent has the power to act on your behalf. An “immediate” power of attorney grants your Agent the ability to immediately start acting on your behalf: As soon as the ink dries on your signature, your Agent could take that piece of paper and use it to help you pay your power bill or set up a new bank account.
A “springing” power of attorney, on the other hand, only allows the named Agent to “spring” into action upon confirmation of a triggering event. Usually that triggering event is written certification by the principal’s physician that the principal is incompetent or incapable of making decisions; at which point, only then may the Agent act on the principal’s behalf.
Choosing the right Power of Attorney is a matter of preference and circumstance. Our attorneys work with you to help you make the appropriate choice and then draft accordingly.
Living Will
Also known as an “Advanced Healthcare Directive,” think of your Living Will as a letter to your family you hope they never have to read. This letter is about your end-of-life decisions.
It can be hard to have these sorts of conversations with family members, but it is even harder for family members to have to guess at what you would want to have happen if you can’t communicate your decisions. If you have been diagnosed to be in an irreversible coma, do you want to continue to be provided life-sustaining measures, such as artificially provided nutrition and hydration? Do you want to be administered medication to relieve the appearance of pain and suffering, even if it would hasten your passing?
Your Living Will answers these questions so your family doesn’t have to. Having these decisions documented in advance of a crisis situation helps reduce the stress on family members and helps ensures your own wishes are implemented.
Revocable Living Trust
If your Will is the game plan that puts your estate plan into action upon your death, think of a Revocable Living Trust as the game plan that puts your estate plan into action while you are still alive. A Revocable Living Trust can be a great estate planning mechanism for you, depending on your estate planning goals, assets, and family dynamic.
At the very least, IF you own property outside the State of Washington and have no intent to move to that other state where the property is located, we strongly suggest you place that property in some form of a Revocable Living Trust to avoid having to probate your Estate in that second state upon your death. We especially recommend this course of action if you own property in the State of California, where probate is costly and can take years to complete.
At Ludwick Law Group, we work with you to help decide between using a Trust or a Will, based on a tax-efficient, real world strategy.