Estate Planning Essentials: Tools & Tips
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Mark Reinhardt, Attorney
Rehberg Law Group, PLLC
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Control and Peace of Mind
Estate Planning is Strategic
W
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t
“
v
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h
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t
o
a
d
m
i
n
i
s
t
e
r
m
y
e
s
t
a
t
e
?
Do Nothing or “Intestacy”
Titling
Community Property Agreements
Wills
Revocable Living Trusts
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Planning for Surviving Spouse
Planning for Children and Grandchildren
I
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F
M
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N
D
•
B
e
i
n
g
i
n
c
o
n
t
r
o
l
o
f
:
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My estate as long as you are able
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Who manages my estate if I become incapacitated without court intervention
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Where and how my assets go after I die
•
H
a
v
i
n
g
P
e
a
c
e
o
f
M
i
n
d
a
b
o
u
t
:
•
Making the administration of your estate as simple and conflict-free as
possible
•
Avoiding surprises
•
Minimizing taxes, costs and attorney fees
Will
or Trust
Titling and
TOD
Coordinated
Estate Tax
Planning
Who carries out
the Plan?
Durable Powers
Of Attorney
Financial/Health
Directive to
Physicians
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#
1
:
D
O
N
O
T
H
I
N
G
,
O
R
“
I
N
T
E
S
T
A
C
Y
”
•
Statutes give property titled in your name
to your closest relatives
•
May pass property to unintended
beneficiaries; not those you would choose
•
Problems if you have minor children
•
Requires probate
P
R
O
B
A
T
E
Probate is a court process needed when
deceased’s name is on an account or property:
•
File Will & open probate
•
Obtain “letters
testamentary”
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Notice to creditors
•
Inventory of all assets
•
Sell assets
•
Pay off estate’s debts & costs
•
Distribute assets to beneficiaries
•
Receipts from beneficiaries
•
Request probate be closed
•
Closing probate
P
R
O
B
A
T
E
Probate = Time + Effort + $$ + Public
O
P
T
I
O
N
#
2
:
T
I
T
L
I
N
G
Many people make costly titling mistakes
trying to avoid probate
•
Tenants in Common
•
Joint Tenants with Right of Survivorship
•
Beneficiary Designation
O
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T
I
O
N
#
3
:
C
O
M
M
U
N
I
T
Y
P
R
O
P
E
R
T
Y
A
G
R
E
E
M
E
N
T
S
A CPA is a contract between spouses giving all of the
assets to survivor when the first one dies.
•
Eliminates probate on the first death: SIMPLE!
•
You still need a Will
•
Washington CPA valid in Washington only
•
Not appropriate if you don’t want all to go to the survivor
•
Don’t do “I love you” Wills if your estate is over $2,000,000
O
P
T
I
O
N
#
4
:
W
I
L
L
S
•
Your Will determines who your
beneficiaries are
•
Wills avoid a mess but won’t
avoid a probate!
•
Wills won’t protect you if you
become incapacitated
W
I
L
L
S
A
N
D
P
R
O
B
A
T
E
Factors in judging whether you want to avoid
probate:
•
How well is your Will
drafted?
•
How complex are your
assets?
•
Where are the real
property assets?
•
How large is your estate?
•
Do you have stinky relatives?
•
Who is the attorney?
O
P
T
I
O
N
#
5
:
R
E
V
O
C
A
B
L
E
L
I
V
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N
G
T
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U
S
T
S
L
i
v
i
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g
T
r
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s
t
s
a
r
e
a
n
a
l
t
e
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n
a
t
i
v
e
t
o
W
i
l
l
s
a
n
d
P
r
o
b
a
t
e
•
A
Trust is a legal entity that continues through death until your
estate is distributed
•
Trusts have a Trustor, a Trustee, and beneficiaries
•
Your Trust contains the distribution provisions that would
normally be in your Will
L
I
V
I
N
G
T
R
U
S
T
S
•
You retain the same control over your
assets as before
•
You can amend or revoke the Trust at any
time
•
No additional record-keeping or tax returns
are required
L
I
V
I
N
G
T
R
U
S
T
S
•
Your successor Trustee fulfills the duties of an executor, but
without the courts and extensive attorney involvement
•
Critical that Trust is “fully funded” (all assets that are
probatable are titled in the name of, or beneficiary to, your
Trust) in order to avoid Probate
P
R
O
’
S
A
N
D
C
O
N
’
S
O
F
L
I
V
I
N
G
T
R
U
S
T
S
P
r
o
’
s
:
Privatizes the estate administration process
Provides predictability in fees and hassle
Provides incapacity protection
Keeps estate organized
C
o
n
’
s
Higher up-front costs
More work to set up (funding)
Must put new assets in Trust or will have
Probate
W
H
E
N
I
S
A
L
I
V
I
N
G
T
R
U
S
T
A
P
P
R
O
P
R
I
A
T
E
?
•
Avoid the hassle and time delays involved in a
Probate, and have family members settle the
estate instead of an attorney
•
When Probate will be costlier than a Trust
•
Whenever there will be two or more Probates
(e.g., real estate in other states)
“
H
a
v
e
I
p
r
o
p
e
r
l
y
p
l
a
n
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m
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?
”
P
L
A
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F
O
R
S
U
R
V
I
V
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N
G
S
P
O
U
S
E
1.
“I Love You, Honey” Planning
•
Deceased’s side goes to Spouse
•
In Washington, use a Community Property Agreement
•
No protections from Predators, Creditors, and Estate Taxes
•
No Beneficiary Protection
2.
“I Love You, Honey … But” Planning
•
D
e
c
e
a
s
e
d
’
s
s
i
d
e
g
o
e
s
t
o
a
T
r
u
s
t
f
o
r
S
p
o
u
s
e
•
Income + Principal if needed
•
Protection from Predators, Creditors, and Estate Taxes
•
Beneficiary Protection
T
H
E
“
T
A
X
-
W
I
S
E
”
W
I
L
L
O
R
T
R
U
S
T
Estate Value: $4,000,000
Ward’s Assets:
$2,000,000
June’s Assets:
$2,000,000
Both
Alive
Family
Trust
Survivor
Spouse is Trustee
Spouse receives
all Income and
Principal as necessary
Protected from creditors and
predators
P
L
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N
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F
O
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C
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R
E
N
A
N
D
G
R
A
N
D
C
H
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L
D
R
E
N
•
Minors
•
Guardian provisions
•
Testamentary trusts
•
Manners
•
Irresponsible Children
•
Incentive Trusts
•
Minders
•
Special Needs Trusts
•
Dynasty
Trusts
I
S
Y
O
U
R
P
L
A
N
N
I
N
G
U
P
T
O
D
A
T
E
?
•
2018 Tax Cuts and Jobs Relief Act (Estate Tax &
Sunset)
•
2017 Power of Attorney Act (Powers of Attorney)
•
2012 Washington Trust Act (trust requirements)
•
HIPAA (Health Care Powers of Attorney)
•
Changes in Desires, Assets, Family and Friends
R
E
S
O
U
R
C
E
S
•
Get Your Ducks in A Row
, Harry Margolis
•
Estate Planning Smarts
by Deborah Jacobs
•
JK Lasser’s New Rules for Estate and Tax Planning
by Stewart H. Welch III and J. Winston Busby
•
https://www.youtube.com/watch?v=V11IcRNrVSs
•
rehberglaw.com
Only put off tomorrow what you are willing to die having left undone.
- Pablo Picasso
G
E
T
S
T
A
R
T
E
D
Phone: (206) 246-8772
Toll Free: (877) 246-8772
Email:
contact@rehberglaw.com
Website:
rehberglaw.com
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Dive into the strategic aspects of estate planning with insights on control, peace of mind, beneficiary planning, wills vs. trusts, probate processes, and more to secure your assets and legacy effectively.
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Presentation Transcript
ESTATE PLANNING: TOOLS, TIPS, TRICKS, AND TRAPS Mark Reinhardt, Attorney Rehberg Law Group, PLLC
TOPICS TO BE COVERED What is estate planning? Control and Peace of Mind Estate Planning is Strategic What is the best vehicle to administer my estate? Do Nothing or Intestacy Titling Community Property Agreements Wills Revocable Living Trusts Have I properly planned for the beneficiaries of my estate? Planning for Surviving Spouse Planning for Children and Grandchildren Is my planning out of date?
ESTATE PLANNING IS ABOUT CONTROL AND PEACE OF MIND Being in control of: My estate as long as you are able Who manages my estate if I become incapacitated without court intervention Where and how my assets go after I die Having Peace of Mind about: Making the administration of your estate as simple and conflict-free as possible Avoiding surprises Minimizing taxes, costs and attorney fees
Will or Trust Durable Powers Of Attorney Financial/Health Who carries out the Plan? Directive to Physicians Estate Tax Planning Titling and TOD Coordinated
What is the best vehicle to administer my estate?
OPTION #1 : DO NOTHING, OR INTESTACY Statutes give property titled in your name to your closest relatives May pass property to unintended beneficiaries; not those you would choose Problems if you have minor children Requires probate
PROBATE Probate is a court process needed when deceased s name is on an account or property: Sell assets File Will & open probate Pay off estate s debts & costs Obtain letters Distribute assets to beneficiaries testamentary Receipts from beneficiaries Notice to creditors Request probate be closed Inventory of all assets Closing probate
PROBATE Probate = Time + Effort + $$ + Public
OPTION #2 : TITLING Many people make costly titling mistakes trying to avoid probate Tenants in Common Joint Tenants with Right of Survivorship Beneficiary Designation
OPTION #3 : COMMUNITY PROPERTY AGREEMENTS A CPA is a contract between spouses giving all of the assets to survivor when the first one dies. Eliminates probate on the first death: SIMPLE! You still need a Will Washington CPA valid in Washington only Not appropriate if you don t want all to go to the survivor Don t do I love you Wills if your estate is over $2,000,000
OPTION #4 : WILLS Your Will determines who your beneficiaries are Wills avoid a mess but won t avoid a probate! Wills won t protect you if you become incapacitated
WILLS AND PROBATE Factors in judging whether you want to avoid probate: How well is your Will drafted? How large is your estate? How complex are your Do you have stinky relatives? assets? Who is the attorney? Where are the real property assets?
OPTION #5 : REVOCABLE LIVING TRUSTS Living Trusts are an alternative to Wills and Probate A Trust is a legal entity that continues through death until your estate is distributed Trusts have a Trustor, a Trustee, and beneficiaries Your Trust contains the distribution provisions that would normally be in your Will
LIVING TRUSTS You retain the same control over your assets as before You can amend or revoke the Trust at any time No additional record-keeping or tax returns are required
LIVING TRUSTS Your successor Trustee fulfills the duties of an executor, but without the courts and extensive attorney involvement Critical that Trust is fully funded (all assets that are probatable are titled in the name of, or beneficiary to, your Trust) in order to avoid Probate
PROS AND CONS OF LIVING TRUSTS Pro s: Privatizes the estate administration process Provides predictability in fees and hassle Provides incapacity protection Keeps estate organized Con s Higher up-front costs More work to set up (funding) Must put new assets in Trust or will have Probate
WHEN IS A LIVING TRUST APPROPRIATE? Avoid the hassle and time delays involved in a Probate, and have family members settle the estate instead of an attorney When Probate will be costlier than a Trust Whenever there will be two or more Probates (e.g., real estate in other states)
Have I properly planned for the beneficiaries of my estate?
PLANNING FOR SURVIVING SPOUSE 1. I Love You, Honey Planning Deceased s side goes to Spouse In Washington, use a Community Property Agreement No protections from Predators, Creditors, and Estate Taxes No Beneficiary Protection 2. I Love You, Honey But Planning Deceased s side goes to a Trust for Spouse Income + Principal if needed Protection from Predators, Creditors, and Estate Taxes Beneficiary Protection
THE TAX-WISE WILL OR TRUST Estate Value: $4,000,000 Ward s Assets: $2,000,000 June s Assets: $2,000,000 Both Alive Spouse is Trustee Spouse receives all Income and Principal as necessary Family Trust Survivor Protected from creditors and predators
PLANNING FOR CHILDREN AND GRANDCHILDREN Minors Guardian provisions Testamentary trusts Manners Irresponsible Children Incentive Trusts Minders Special Needs Trusts Dynasty Trusts
IS YOUR PLANNING UP TO DATE? 2018 Tax Cuts and Jobs Relief Act (Estate Tax & Sunset) 2017 Power of Attorney Act (Powers of Attorney) 2012 Washington Trust Act (trust requirements) HIPAA (Health Care Powers of Attorney) Changes in Desires, Assets, Family and Friends
RESOURCES Get Your Ducks in A Row, Harry Margolis Estate Planning Smarts by Deborah Jacobs JK Lasser s New Rules for Estate and Tax Planning by Stewart H. Welch III and J. Winston Busby https://www.youtube.com/watch?v=V11IcRNrVSs rehberglaw.com
GET STARTED Only put off tomorrow what you are willing to die having left undone. - Pablo Picasso REHBERG LAW GROUP, PLLC Phone: (206) 246-8772 Toll Free: (877) 246-8772 Email: contact@rehberglaw.com Website: rehberglaw.com
