What is a Will?
A Will is a validly executed written instrument that allows you to direct how you want your assets (estate) to pass when you die and to nominate a Personal Representative. If you have minor children, you would also nominate a Guardian for the care of your children in you Will.
What is a Personal Representative?
A Personal Representative is the person or entity responsible for managing the affairs of a deceased person during the probate process.
What is a Trust?
A trust is a fiduciary relationship that allows a third party, or trustee, to hold property or assets on behalf of one or more beneficiaries, subject to the terms of the rules described in the trust agreement. There are different types of trusts that serve different purposes. Purposes of trusts include reducing estate tax liability, controlling the use of the trust property, and avoiding probate. Generally, they fall into one of two categories: testamentary trusts or inter vivos or living trusts.
What is a Testamentary Trust?
A Testamentary Trust is a trust created within your Will, which does not become effective until after you die. The Will directs your assets or a portion of your assets into the Trust. The terms of the Trust dictate when and how the trust assets are to be distributed; allowing you to control what happens to your assets after you pass away. The most common type of testamentary trust is one for the benefit of minor children. These trusts may be set up so that the child may receive some benefit from the trust assets, such as for his or her maintenance, education, support, or health, while they are still a minor, but the remaining trust assets are ultimately distributed to the beneficiary upon his or her reaching the age of your choosing as stated in the trust.
What is a Living Trust?
An inter vivos or living trust is one that is created and funded during your life. The most common type of living trust is a Revocable Living Trust. A Revocable Living Trust (RLT) is an alternative to the traditional Will that allows a probate-free transfer of assets at death and allows for centralized management of assets during your lifetime should you become incapacitated. A RLT can also be split into two or more trusts to accomplish other desired goals, such as for tax planning, to protect children from prior relationships or to provide for a beneficiary with disabilities. It is important to consult with an attorney to fully explore your needs and goals to evaluate what device would work best for your estate plan.
What is Probate?
Probate is the court process in which an estate is administered. The Probate process includes appointing a personal representative to administer the estate, settling any and all proper debts of the estate and distributing assets to the beneficiaries. If applicable, at this time the Guardianship of minor children would be arranged.
Does everyone have to do a Probate?
No. In Washington, if your estate size is valued under a certain amount set by state law, other methods may be used. However, there are particular requirements to be able to use these methods, which should be discussed with an attorney.
Can I avoid Probate?
Yes, there are ways to avoid probate through your estate planning. In order to determine whether these probate avoidance mechanisms are appropriate in your specific situation, you should seek legal advice.
What is a Health Care Directive/Living Will?
A Health Care Directive or Living Will is a document expressing your desires regarding the medical care you wish to receive in the event that you have a terminal condition where life-sustaining treatment, such as nutrition and hydration, would only artificially prolong the dying process or when you are in an irreversible coma with no reasonable chance of recovery.
What is a Health Care Power of Attorney?
A Health Care Power of Attorney is a document creating an agency relationship that gives an agent (Attorney-in-Fact) selected by you (the principal) authority to make health care decisions on your behalf, including consenting to, stopping or refusing medical treatment, should you become unable to make these decisions for yourself.
What is a Financial Power of Attorney?
A Financial Power of Attorney is a document creating an agency relationship that gives an agent (Attorney-in-Fact) selected by you (the principal) authority to act on your behalf with regard to your finances, such as pay bills, conduct banking transactions, and conduct business on your behalf. If the Power of Attorney is also durable, the agency agreement continues to be effective, even if you no longer have capacity to conduct these tasks on your own behalf. By having such an agreement, you can avoid costly and invasive guardianship proceedings.