Spokane Wills & Trusts Attorney
Helping Protect Wishes Now and In the Future
Wills and trusts are two types of legal tools that people can use to manage their property. Wills don’t have any legal effect until the creator dies. Trusts can manage property both during life and after death. Wills and trusts can both be used as part of an overall estate plan. A Spokane estate plan encompasses more than just transferring assets upon death. An estate plan is a contingency plan. It includes decision-making for events that could happen tomorrow as well as for what might happen down the road. At ELG Estate Planning, a Spokane will and trust attorney will help you with some of life’s most important decisions and helps ensure our clients and their families are protected now and into the future.
Maybe It’s Time to Think About Getting a Will
According to Caring.com’s annual estate planning and wills survey, about 66% of American adults don’t have a will, even though most believe estate planning is important.
So why haven’t the majority of Americans taken care of something they consider to be important? The number one reason given is procrastination. There is no sense of urgency. For many people, estate planning is something they will get around to when they perceive the need.
What kind of circumstance might motivate someone to perceive the need for a will? Over 40% of those surveyed said a health concern or medical diagnosis would be the push they needed. The problem with waiting until an unfavorable health issue occurs is that a person may no longer be legally capable of executing the necessary documents.
The purpose of having a will and an estate plan is to be prepared in advance for unexpected events and make sure your wishes are known and followed. Having an estate plan in place confers the authority to take action as necessary and avoids legal delays while waiting on a court to make decisions. A Spokane will and trust attorney from ELG Estate Planning can help you with the creation of your will.
Wills in Washington
A will is the document most often used in estate plans to transfer property upon death. Wills can also establish legal relationships, such as the appointment of a guardian for minor children or the creation of a trust. Anyone of sound mind who is at least 18 years old can make a will in Washington.
Wills are typically part of an estate planning package that includes two other documents.
A durable power of attorney appoints another person to legally act on behalf of someone who becomes unable to make important decisions for themselves due to illness or injury. An advance or healthcare directive expresses a person’s wishes about end-of-life care and helps family members and healthcare providers who may be faced with end-of-life choices.
When someone with a will dies, the person who has custody of the will (if not the executor) has 30 days to deliver it to the executor or to the appropriate court. An executor has 40 days to deliver a will to the court.
Probate is the court-supervised process of carrying out the terms of the will. Although all wills must be filed with the court, not all wills must go through the probate process. For estates valued at less than $100,000 with no real property, an affidavit from the party legally entitled to the asset is sufficient to transfer the property.
What Happens When You Don’t Have a Will?
When a person dies without a will, Washington provides a distribution plan for any remaining real and personal property. A petition is submitted to the court, and an administrator is appointed who acts as executor.
The distribution goes primarily to a surviving spouse and children and moves on to more distant relatives if there is no spouse or children surviving.
What You Can Do with a Trust?
Establishing a trust is a way to separate the legal ownership of property from its beneficial use. A trust becomes the legal owner of the property transferred to it, which is then managed by a trustee for the benefit of named beneficiaries. As the legal owner of property, a trust can be a tax-paying entity.
A trust document describes the property the trust will own, names the trustee, and specifies how the trust is to be managed. Trusts may be created with the authority to be revoked under certain circumstances, or they may be irrevocable.
Trusts can be useful in estate planning because they can legally remove assets from an individual estate when it is beneficial to do so. They also offer the ability to have the property professionally managed on behalf of others who may need assistance. Property from a trust can be distributed directly to a beneficiary without court involvement.
Why You Might Want to Consider a Trust
Trusts are used in estate planning for three main purposes.
- To minimize or avoid paying taxes.
- To manage and control the distribution of property when something other than outright distribution is desired.
- To avoid unwanted publicity since trusts can operate privately without any public oversight.
The use of trusts in estate planning can get very creative where large estates are otherwise facing significant estate tax liability. For most people wanting to reduce potential estate taxes, there are some commonly used types of trusts that are recommended depending on individual circumstances.
Trusts That Will Accomplish Specific Purposes
Trusts can be created during the life of the grantor (the person creating the trust), or they may be created at the time of the grantor’s death. The particular type of trust to be used will depend on what the grantor is trying to accomplish.
Trusts created to avoid taxes or to allow a beneficiary to qualify for some type of government benefit must be irrevocable and must meet other qualifications with regard to the use of the trust property. Revocable trusts are not used for tax planning purposes.
Revocable Living Trust
Revocable living trusts are an estate planning tool used by persons who wish to avoid having their property go through the probate process. These types of trusts are created while the grantor(s) are alive, and the grantor(s) typically serve as trustees with complete freedom to do as they wish with the property. The only real difference is that all of the property is titled in the name of the trust instead of named individuals.
As the name implies, revocable living trusts can be revoked at any time. Thus, the property in the trust is taxed to the grantor(s) as individual(s) and not to the trust. Revocable living trusts offer no tax benefits.
Marital Trust
Also known as a credit shelter trust, a marital trust used to be the only way a married couple facing estate tax liability could take advantage of both estate tax exemption amounts when all property was to pass to the surviving spouse.
The estate of the first spouse to die gets an unlimited marital deduction, so no estate tax is due until the death of the second spouse. Without using a trust, the exemption amount of the first spouse would be unused and unavailable to offset estate tax when the second spouse died.
Transferring property to a trust instead of directly to the surviving spouse triggers the estate tax. The idea was for the trust to own property valued at the amount of the estate tax exemption, so it created a wash for tax purposes. Although the surviving spouse would not have legal ownership of the trust property, the property could be used to benefit the surviving spouse during life and then would pass to heirs when the second spouse died.
Since 2011, it is no longer necessary to create a trust to preserve both estate tax exemption amounts between married couples. The estate of the decedent spouse may elect to transfer any remaining exemption amount to the surviving spouse. However, ‘portability’ must be elected on a timely filed – within 9 months – estate tax return.
The primary advantage to using a marital trust now would be to remove assets from the married couple’s estate, use the exemption amount to offset the tax, and then allow the property in the trust to appreciate without needing to pay any additional estate tax on the appreciation when the property eventually passes to heirs.
In 2023, the individual estate tax exemption amount is $12,920,000, so a marital trust could be a good way for some couples to remove property with high appreciation potential from the estate of the surviving spouse and protect the increase in value from further estate taxation. In 2025, the individual estate tax exemption amount is $13,990,000, so a marital trust could be a good way for some couples to remove property with high appreciation potential from the estate of the surviving spouse and protect the increase in value from further estate taxation.
Special Needs Trust
Special needs trusts are created to hold assets for the benefit of people who would be disqualified from receiving government benefits if they owned the assets directly. The individual countable resource limit for the two main benefits people want to qualify for – Supplemental Security Income (SSI) and Medicaid – is $2,000.
Supplemental Income Trust
A person with disabilities may need to collect SSI from an early age. Supplemental income trusts are written so they are able to provide as much resource support to a beneficiary as possible while not having those additional resources counted against the beneficiary’s SSI eligibility.
A special needs trust for an SSI recipient must not be able to give assets directly to the beneficiary or pay for the beneficiary’s food or housing. But the trust can pay for other needs of the beneficiary, such as:
- Medical care
- Personal and professional services
- Education
- Entertainment
Medicaid Trust
Medicaid provides coverage for Long-Term Care services. According to the Office of the Assistant Secretary for Planning and Evaluation (ASPE), 70% of the adults who reach age 65 will need some type of Long-Term Care service before they die.
Medicaid recipients must be within monthly income and total asset limits to qualify for benefits. Married couples can have only $3,000 in assets between them if both spouses want to qualify. If only one spouse needs benefits, the other spouse may be allowed to keep more assets depending on the type of care needed.
Certain property is exempt from inclusion in the asset totals for Medicaid purposes. The following property is not counted toward Medicaid eligibility:
- A primary residence – as long as the recipient intends to return or a spouse lives there
- Household furnishings
- Personal belongings
- One vehicle
- Irrevocable burial trusts (pre-paid funeral expenses)
Transferring assets to a Medicaid trust is a way to retain some use of the property and still qualify for Long-Term Care benefits. A Medicaid recipient can be paid income from the trust up to the allowed monthly amounts. However, a Medicaid trust must be irrevocable, and property must be transferred to the trust at least 5 years before applying for Medicaid, or benefits may be delayed.
A Medicaid trust protects the property during the life of the grantor. However, since the trust was funded with the Medicaid recipient’s own property, Washington law allows the state to recover the value of the Long-Term Care services from the remaining trust property when the recipient dies. Careful planning can help keep more of a family’s property in the family.
When special needs trusts are created by anyone other than the recipient of the government benefits, the state has no right to recover from the trust, and any property remaining will go to the named beneficiaries.
Trusts can be used in a variety of ways to help people achieve estate planning and asset protection goals. Individual circumstances and preferences will determine which trusts best meet a family’s needs. A good estate plan is integrated and builds in as much flexibility as possible to adapt to the possibility of changing conditions in the future, which a Spokane will and trust attorney at ELG Estate Planning can help you with.
Contact a Spokane Will and Trust Attorney From Our Team
Having an estate plan in place means you recognize the importance of planning ahead and can enjoy peace of mind knowing you are ready should something unexpected happen. Your estate plan helps your family understand your wishes and make the best decisions on your behalf.
We focus exclusively on estate planning and elder law at ELG Estate Planning. A Spokane will and trust attorney helps clients develop estate plans that meet their management and distribution goals while protecting their assets from avoidable taxes. If you live in the Spokane area and are ready to discuss your estate plan, get in touch with ELG Estate Planning to arrange a consultation with one of our experienced and compassionate Spokane will and trust attorneys.
If you or your loved ones are in need of a Spokane will and trust attorney, contact Elder Law Group for more information
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