September 2020

When you pass away, probate is the legal method of transferring your assets to your beneficiaries. Assets do not always have to go through probate, however. Most people prefer not to go through probate, however, because it is a lengthy and costly process. When planning your estate , you may want to know which types of assets avoid probate altogether, and what the benefit is to doing so. Benefits of skipping probate Assets that must go through probate take longer to get to your intended beneficiaries. On the short end, it will take about six months for things to finalize. On the long end, however, your heirs could wait years to receive anything. Skipping probate greatly reduces the time it will take for your grieving family to receive what you leave to them. Additionally, probate is costly. Money from your estate will go to pay for court costs, lawyer fees and other expenses related to the process. This decreases the amount of money your beneficiaries ultimately receive. These reasons alone are generally enough for most people to structure assets to avoid probate. Assets that skip probate According to FindLaw, the following assets skip probate entirely and go directly to your heirs. Property inside of a revocable trust Assets that qualify as community property Real estate with joint tenancy or tenancy by the entirety Retirement accounts with a listed beneficiary Real estate with a transfer on death deed Bank accounts with a transfer on death or payable on death ownership type Keep in mind that retirement accounts with a designated beneficiary will only go to that beneficiary, even if they are inside a trust with a different beneficiary. It is important to review your estate plan every several years to ensure your beneficiaries are still correct.

Making estate plans can be a complicated affair. You could forget to include an asset in your will. You might fail to take advantage of an estate planning move that could better benefit your heirs. Fortunately, if you know about some estate planning pitfalls in advance, you might avoid them and create a better estate plan than you had first envisioned. A lot of mistakes are simple omissions. Nonetheless, some of them could lead to serious problems for your heirs. Kiplinger explains what some of these common mistakes are and how to avoid them. Failing to plan for long term care Consider creating plans for your long term care and disability care while you can still work and put away money for retirement. As you grow older, you will likely incur greater health problems. Someday, you will likely need to leave the work force. Think about putting in place options like life insurance and disability coverage. Also consider how you may fund possible nursing home costs. Not titling your ownership correctly You have to be careful how you title your assets. Incorrectly titling your property can cause real problems when it comes time to transfer what you own to your children. For instance, if you have a trust, you want to title your assets so they belong to the trust. Conversely, you may want to keep property such as retirement accounts out of the trust. Also, if you own a business, be careful how you title your business property. There is plenty of potential to mix up business and personal ownership. Check to see that you have not titled business assets in your own name. Neglecting charitable giving Chances are you have a cause you feel passionate about. If so, you have an opportunity to give to your cause through your estate plans. Some of these methods include setting up a charitable remainder trust or a donor-advised fund. You can give to your favorite church, university or activist group while boosting your tax benefits to the greatest extent possible. Not having an organized plan  Many people do imagine what they want to happen in their older years or after they die, but they have not placed formal mechanisms, such as trusts or wills, to carry out their wishes. Without a will or a trust, the state will disperse your estate through its intestate laws, which may result in your money and property going to somebody that you do not want to receive from you. Formally organizing your estate wishes into actionable documents like a will may save your heirs a lot of stress and heartache.

Estate planning in Washington is essential, whether you have recently started a family or have just celebrated your retirement. It is important that your estate plan reflects the life you currently live, and you can update your plan periodically in the future if needed. As unpleasant as it may seem, no one knows when their life is going to end. Having your estate organized can simplify matters for your family upon your passing. What documents will I need? There are several critical documents you need to fully prepare your estate , according to Forbes. The first and foremost is the last will and testament. Not only does your will dictate who you want to oversee the finalization of your estate, it allows you to name who you would like to receive your property once you pass. Finally, wills enable you to declare who would act as guardians to your children in the event of your death. Other documents include the following: Advanced medical directives tell healthcare professionals your wishes if you are not able to speak for yourself. Durable powers of attorney names a person who is able to handle your finances if you become mentally and/or physical injured. Trusts enable your property to transfer directly to the beneficiary without having to enter the probate process. Every estate is unique, and you can customize your documents to reflect the circumstances surrounding your case. How can I create these documents? There are several options when creating your documents. There are some software programs designed to assist you in planning your estate. You can also enlist the help of an attorney to walk you through the process, and ensure you have everything in place.

People who want to create or update their estate plan as their lives change, they may need to review a variety of instructions, wishes or types of documents. An estate plan may include far more than a will or a trust alone. One element of estate planning that may be of particular benefit or importance to most any person is that which provides direction for a person’s medical condition or health. An advance directive and a living will provide the means by which people may lay out their choices regarding this. Choices regarding lifesaving treatments As explained by SmartAsset, a single accident may render a person unconscious or otherwise unable to make decisions regarding their medical care with no advance warning. An advance directive allows a person the ability to proactively indicate their preference for the use or not of any lifesaving measures . These may include feeding tubes, ventilators or other resuscitation methods. Managing medical care Along with an advance directive, the American Cancer Society indicates that a living will rounds out a person’s preventive actions when it comes to managing their health care needs if they cannot do so on their own behalf. A living will names another person as the entity able to and responsible to communicate with physicians and medical teams and to make choices about care and general needs. A living will may also be referred to as a medical power of attorney or a durable power of attorney for health care. It works similarly to a durable power of attorney that allows another party to manage someone’s finances when they cannot so for themselves.