Is it Ever Too Early to Create an Estate Plan?

Life can get busy. With relationships, kids, jobs, bills, and pets, it can be easy to put off thinking about estate planning, especially when you are young and healthy. In the not-so-distant past, estate planning was thought of as something only the wealthy needed to manage large estates. This misconception has led many to suffer the unfortunate consequences of being unprepared in the case of an accident, medical crisis, tragedy, or early death.

Without an estate plan, loved ones and beneficiaries are left uncertain about how to fulfill their wishes, including appointing guardians for minor children, designating heirs for their assets, and providing for beneficiaries.

There is no set age to begin the estate planning process. Times for consideration include when you start to accumulate assets, get married or enter into a committed relationship, or have children. Below are a few reasons you should create an estate plan now as part of your overall financial plan.

Planning for an Unexpected Accident, Disability, or Medical Problem.

Though it is uncomfortable to think about, any of us, at any time, could become disabled or have a medical crisis that incapacitates us and our ability to support ourselves and our families. Whether you are the primary breadwinner or the primary caretaker for your children, a well-thought-out estate plan will detail your wishes on how your affairs will be managed under these unfortunate circumstances.

Creating a Power of Attorney and Healthcare Directive Documents.

A Power of Attorney is a legal document that allows you to give one or more people the power to act as an agent on your behalf. You can determine how much or how little power you want to give your agent(s). A Healthcare (or Advanced) Directive is another legal document that allows you to specifically detail in advance what procedures or care you would like healthcare professionals to provide or not to provide. If you should become debilitated or unable to make decisions cognitively, choosing someone you trust to serve as your Healthcare Power of Attorney is crucial for following through with the directives that you have prearranged.

Planning for or Avoiding Probate.

If you should die without a Will or testamentary instrument as part of your estate plan, the statutes will determine how your assets are distributed to your heirs. Most people prefer to control and direct where their assets will go rather than rely upon the statutory defaults.

Furthermore, if there are persons whom you would like to benefit that do not fall within the statutory disposition, you will need to plan for them actively. A primary objective for creating an estate plan is safeguarding your family and children and smoothly transitioning your assets.

While Washington has a reasonably efficient probate process, there are some situations where the avoidance of the probate process is a priority. The use of a revocable trust may be the right fit for you depending on the specifics of your situation. Factors can include whether you own property in multiple jurisdictions, have a prenuptial agreement or significant separate property, or are concerned about privacy.​

Protecting Children.

Many young couples neglect to identify what would happen to their children in the event of both of their untimely deaths. As uncomfortable and difficult as such a loss is to consider, addressing it as soon as you become a parent is critical. Your estate plan will identify the name of the guardian(s) you appoint for your minor children. Identifying someone you trust to be the caretaker of minor children can help to resolve family concerns and disputes. You can also plan ahead for your children by creating trusts that step in to provide the things you would have provided were you still with them.

Determining Pet Care.

For many individuals and couples, their pets are an extension of their family, and their welfare is a top priority. Considering who will take care of your pets should the need arise is essential. Some people leave money in a pet trust to ensure their animals are well cared for and not sent to a shelter or euthanized. Important pet care provisions like this can be made through your estate plan.

Avoiding Tax Ramifications.

Tax issues are always considered when developing an estate plan to help heirs avoid unnecessary tax burdens. For example, beneficiaries must pay income tax on money inherited through a traditional IRA. If, however, the funds are in a Roth IRA, then withdrawals are generally income tax-free. If you have assets exceeding several million dollars, your estate plan might include a plan for federal and/or state estate taxes or the “death tax.” Many states, including Washington, have an estate tax that can be addressed in your estate plan.

Appointing a Personal Representative.

Your estate plan will name the person(s) you choose to administer your property and all assets after your death. This person is called your personal representative. It will be helpful for everyone, particularly your personal representative, if the following documents and information are easily accessible through your estate planning documents:

• A list of your significant estate and financial planning contacts, including your attorney, accountant, financial planner, insurance agent(s), realtor, banker, all creditors, debtors, doctors, and any other important contacts needed to transition your real property, accounts, and all assets smoothly.
• Insurance policies
• Real estate deeds
• Certificates for stocks, bonds, annuities
• Bank accounts, mutual funds, and safe deposit boxes
• Retirement plans, 401(k) accounts, or IRAs
• Mortgages, all loans, utilities, house maintenance contacts, and unpaid taxes

Making Funeral Arrangements.

Do your loved ones know if you would like to be cremated or have a standard burial? Do they know if your preference is to hold a funeral, or would you prefer a celebration of life party? How you envision your life being recognized can be part of your estate plan. This includes taking the burial or funeral cost burden off your family by setting up a payable-on-death account at your bank or credit union. Funds in this account can then be used to pay for cremation, funeral, burial, and other related expenses.​

While it can be emotional and challenging, it is important to remember that planning your estate can ease the burden on your loved ones and create peace of mind in an already difficult time. Working with a professional can help ease the burden and provide clarity on ensuring that your wishes are carried out effectively.

How Can PRK Livengood Help?

As Bellevue estate planning lawyers, we provide Washington clients with experienced estate planning guidance concerning asset preservation and distribution, tax minimization, and healthcare and related directives in the event of incapacity.  By understanding the needs of each client, we can provide the right instruments that will best accomplish their objectives. Learn more here: https://prklaw.com/practice-area/estate-planning/ or contact Wendy Allard today at wallard@prklaw.com or 425.990.4016.

Firm Contact: