How better estate plans, contracts and agreements can reduce stress in your life and help you prepare for a prosperous future.

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Seattle Estate Planning Law Blog

Trusts can provide the means to reduce estate taxes

The Tax Cut and Jobs Act of 2017 provided people with additional options regarding transfer of property through estate planning and the use of the gift tax exemption in Washington. The lifetime amount that a person can gift increased to $11.4 million for a single person or $22.8 million for a couple. The gifted amount is typically exempted from gift and estate taxes depending on what is given and when. Establishing trusts is one way to establish such gifts.

People looking to gift a portion of their estate to reduce the estate tax liability may give monetary gifts in the form of college tuition, a wedding or a charitable contribution. Another option that is available is the gift of real estate. Gifting real estate allows one to take advantage of the gift allowance without detracting from the value of liquid assets.

Is a bypass trust right for you?

Many people understand how important it is to create a comprehensive estate plan. They want to ensure that their loved ones receive proper care before their passing, and they want to have a legal record of any final wishes for their own care or matters that may come up after death. Creating an estate plan with an attorney is an effective way to accomplish those goals.

When you pass away here in Washington, your loved ones might pay estate tax. However, there are ways to minimize your tax burden and leave some non-taxable assets to your heirs. One way to do this is to create a bypass trust.

Estate planning for digital property

So much of people's lives are now lived online, and the resulting digital footprint may not be insignificant. It is natural that with so much of one's life online, a person might wonder what becomes of all that data after he or she dies and what can be done to protect it. Estate planning in Washington now takes into account the transfer of digital assets and property.

There are steps a person can take to protect his or her digital data. It is a good idea to create an inventory of all digital assets, including frequent flyer miles, photos, texts and emails. In addition, a record should be kept of usernames, passwords and two-factor authentication information. The inventory should include a comprehensive list of all devices as well as applications that may contain personal or other valuable data that one wishes to protect.

Existence and location of estate planning documents is vital

As Americans age, and those over 50 are the fastest-growing age group, they are often recognizing the necessity of planning for retirement and their eventual passing. Estate planning enables people to control many aspects of their later years, including health care and financial matters as well as who inherits what. Once the estate documents are created in Washington, who should keep them and who should know there whereabouts?

In days past, safe deposit boxes were frequently used to store important documents. Due to the relatively high cost of that and the availability of other options, that is not as popular as it once was. In addition, getting access to a deceased loved one's box can be a complex and costly endeavor if a person does not have legal access to the box. Fireproof safes are readily available and provide excellent protection.

Tax changes can prompt estate planning document review

The Tax Cut and Jobs Act (TCJA) legislation that was passed in 2017 contained many considerations for taxpayers including changes to the alimony laws and changes in business tax rates in Washington. Of concern to most people may be the change in the gift tax and how that can enable one to potentially reduce the amount of estate tax that may be owed. It may prompt one to take a further look at one's estate planning goals.

Under prior law, the amount one could gift to children or grandchildren was in the neighborhood of $650,000.  Under the TCJA, the gift amount is increased to over $11,000,000 per individual. It is important to know that this is not a permanent change and will expire, or sunset, in 2025. At that time the gift rate is scheduled to return to the neighborhood of $650,000.

Careful estate planning can help promote children's success

Money cannot buy happiness is a phrase often heard. Families of considerable wealth in Washington often have concerns regarding the inheritance of their sizable estates. If children of such families have no concern for their financial future, it is thought that they may also lack a desire to succeed and become fulfilled and accomplished adults in their own rights. Careful estate planning can address this issue.

One of America's wealthiest women, Gloria Vanderbilt, recently passed away at the age of 95. Her son, Anderson Cooper, is an accomplished journalist, author and CNN correspondent. He has three brothers, one of whom died in 1988. Growing up, he believed there was no trust fund and that he needed to make his own way in the world. He has said that had he known that he would one day inherit, he may not have been as driven to succeed.

Estate planning in the digital age

The newest generation of adults grew up with technology. Many of them had cell phones from a young age and could even use computers better than their parents before they reached adulthood. This generation, often referred to as millenials, is comfortable with technology and often adapts quickly to new ones. 

What does this mean for estate planning? It means that younger adults like you in particular will need to pay close attention to their digital assets when considering their estate plans.

Estate planning can ease stress of cancer diagnosis

As women age, their health may become a primary concern as the likelihood of contracting a debilitating illness, such as breast cancer, increases with age in Washington. Estate planning may not on the forefront of one's mind in the wake of such a diagnosis. But it can have a positive impact on one's treatment options and serve to reduce stress and allow one to fully focus on one's treatment and recovery.

The prognosis for breast cancer patients has greatly improved in recent years and many are surviving to live normal lives. Treatment immediately following a diagnosis can be costly depending on one's insurance coverage. It is widely known that medical bills are one of the chief causes of financial problems in many households. Anticipating costs, adjusting budgets and revising financial plans can help address that issue.

Estate planning is needed for small businesses

Small businesses are among the major contributor's in today's economy in Washington. While people will engage in estate planning to protect their families, those who own small businesses are not always aware of the need for estate planning regarding the business. The lack of a succession plan could prove catastrophic in the event of the business owner's passing.

If a couple owns a business together and there is no plan in place for what happens in the event of one of the partner's deaths, the business could be thrown into chaos. If a contract is being negotiated at the time a partner passes and there is no contingency in place, the pending contract could be put in limbo. Such issues can be avoided if there is a plan in place that states who will run the company, and how it will be run, in the event of the owner's or partner's death.

Estate planning may be imperative for single parents

Children provide perhaps the largest impetus to creating an estate plan in Washington. With the arrival of a child the parents' concern naturally centers on the care of the child in the event that something happens to one or both parents. When one is a single parent, estate planning can become a more urgent priority.

Ensuring continuing care for one's child in the event of one's death or incapacity is of paramount importance to most parents. If a child's other parent is living, he or she will often be the designated guardian. However, there are instances when that may not be a viable option. In that event, there are many factors that need to be considered.

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