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National Preparedness Month: Estate Planning – Understanding Wills, Trusts, and Power of Attorney

Estate planning is key for protecting your loved ones and distributing your property the way you choose.

September is National Preparedness Month! Being prepared includes taking time for long-term estate planning. Estate planning explains how your assets will be managed and/or distributed if you become incapacitated.

If you don’t have a will or trust in place, your wishes will not matter. Worse yet, if your family relies on you, they could really suffer. Don’t let this happen to your loved ones, especially if you have family members who rely on you for their very survival. Without a plan in place, your family is left to haggle with the courts (and maybe each other) to settle your estate.

Follow our guide below to get an overview of the various types of assets. Then learn the differences between the basic options in estate planning – wills, trusts, and power of attorney. Then you can make a more informed decision about which ones you use to make your wishes known so the right people and organizations receive what you want to give them.

Assets

Assets cover a wide range of useful or valuable things. Real estate, cars, your home, personal property, investments and cash are all considered assets. Assets include investments such as stocks, bonds and mutual funds. Life insurance is also considered an asset. Personal property, such as collections you own, furniture, antiques, tools, etc., are also considered assets. If you own a business, assets include inventory, equipment, property and accounts receivable.

Nowadays, digital assets also need to be accounted for, including online accounts such as PayPal, bank accounts, investments, social media pages, photos and documents you’ve stored online or in the cloud. Read our blog post, 5 Things you Need to Know about Digital Assets, for more information.

Estate Planning

Making a will, setting up a trust and choosing a power of attorney are all components of estate planning. Estate planning includes managing your assets and deciding how those assets will be distributed once you can no longer make decisions or pass away. Estate planning also involves making plans for your care as well as others who rely on you for their care and support. A carefully thought out estate plan will also keep taxes to a minimum. An attorney can help you create an estate plan that covers all of the bases. See our list of estate planning attorneys who work in Washington state.

Wills

Writing a will as part of estate planning is critical if you don’t want the state deciding how your assets will be distributed. A will is a legal document that describes your wishes for handling your property and assets. There are a few requirements: you must be sounds of mind, 18 years of age or older and in Washington state, you need witnesses to the will. There are a few things a will cannot cover – learn more by reading our recent blog post, Need a Will? What You Need to Know to Write Your Will.

Trusts

Some people prefer to create a trust to determine how their assets will be handled in case they become incapacitated. Trusts are also created to outline how money and assets will be distributed to beneficiaries upon their death. According to an article by AARP, people with larger estates may choose to set up a trust rather than a will. AARP says that setting up a trust minimizes the probate process. It can also provide long-term support for family members with unique needs. Trusts can also be set up to limit the money a beneficiary receives at any one time, says AARP.

 Power of Attorney

If you become incapacitated, your power of attorney can make decisions about your health and assets on your behalf. A power of attorney also manages or pays bills, handles your investments, etc. Most people choose a trusted friend or relative as their power of attorney. We offer to-it-yourself legal kits and forms to set up your power of attorney – click HERE, then scroll down to the “Power of Attorney” kits.

This blog post is not offered as specific advice, which may only be provided by an attorney based upon each individual situation. To find an attorney, click here to visit our attorney referral page

Need a Will? What You Need To Know to Write Your Will

Do you need a will? Find out if you need one, then get tips for writing your will.

Did you know…not everyone will need a will? If you have no relatives and don’t care if the state gets everything you own, you may not need a will. Or, if you have no assets or possessions or you’re okay with your closest relative (such as a parent or a sibling) inheriting everything you own, then you may not need a will in that situation, either. Even so, beware: states vary in how things are divvied up once you pass away.

That’s why taking the time to write a will is important if you want control over what happens to your assets, property and possessions. We offer a do-it-yourself will kit for Washington State that makes it super easy to write down your wishes. But before we get to that, let’s look at some of the basics.

What a Will Does and Doesn’t Cover

A will is a legal document that explains your wishes for distributing your property and assets. Some things aren’t established in a will, though. For instance, according to EstatePlanning.com, a service provided by The WealthCounsel Companies, if you name a beneficiary on your life insurance polity or retirement accounts, a will is not needed for that beneficiary to inherit the asset. But that also means you can’t name someone else to inherit this asset in your will, either.

Requirements for Creating a Will

You’ll need to be legally capable of creating a will, which is why witnesses are required (see below). You must also be 18 years of age or older to make a will. Once you create a will, you need to store it somewhere. If you want your loved ones to find your will, make sure to tell someone where to find it upon your death. If no one can find your will, the state will determine who inherits your property.

 Decide Who Inherits What

Decide who inherits your assets, property and possessions. Don’t forget digital assets. When filling out a will, use the recipient’s whole name, rather than identifying them as your wife or child, as this helps eliminate confusion, says Megan Leonhardt in an article written for Money magazine. She also recommends being very specific about assets, such as providing the address for property or writing down precise descriptions of personal property you plan to leave in your will.

RELATED: Click here to read our blog post about 5 things you need to know about digital assets.

 

Witnesses Required

According to a blog post by Redmond-based Pacific Northwest Law Group (PNWLG), your will must be signed in the presence of two or more witnesses. Otherwise, the will may not be valid. Holographic wills, which are written by hand and do not have witnesses), are not valid in Washington state, says PNWLG. But PNWLG says that if a holographic will was created in a state in which they’re allowed, then Washington state honors the will.

Why worry what will really happen when you can instantly download our do-it-yourself will kit, fill it in, get it witnessed by two people and you’re done? If you have questions or want to divvy up your assets in a way that requires more detailed planning, check out our lawyer referral listings.

Click here to buy an instant download of our DIY Will Kit. If you prefer, you can order a print copy, and we’ll mail the kit to you.

This blog post is not offered as specific advice, which may only be provided by an attorney based upon each individual situation. To find an attorney, click here to visit our attorney referral page.

 

Lawyer Fees: How Much Will Representation Cost?

Lawyer fees vary from firm to firm.

Before you hire an attorney, find out how much the lawyer fees will be. Knowing what you’ll pay can help you plan and budget for the work to be done. Attorney fees and payment arrangements vary from firm to firm, so there’s no set standard.

Ask them to put their fee schedule in writing and find out how they want to be paid. To give you an idea of what to expect, here’s the types of payment arrangements many of the law firms we work with make with their clients.

Hourly Rates

Law firms with set hourly rates charge you by the hour for work done on your case. The lawyer fees may be provided as two different hourly rates: one for work done in the office and another rate for courtroom time. Ask the attorney if the hourly rate includes everything, such as research, court fees and copying. If not, request a breakdown of fees charged beyond the hourly rate. Before you agree to work with the attorney, ask for an estimate on how many hours he estimates your case will take.

Contingency

Some lawyer fees are done on a contingency basis. An attorney who agrees to work on a contingency basis does so without being paid until your case is resolved. Personal injury cases are commonly handled on contingency. Contingency fees can be negotiated, so find out whether she feels the case will be quickly settled or not. A smaller contingency fee may be negotiated if the case requires less work and is settled out of court compared to a lengthy case that goes to trial.

You and your attorney will agree on a percentage as the contingency fee before any work is started. Also ask about other fees you will need to pay for, such as court fees, copying documents and expert witnesses.

Related: Click here to see a list of Accidents & Injuries attorneys in Washington.

Flat Fee

Some attorneys charge by the project, resulting in a flat fee. For instance, they may charge a certain amount to write a will while charging a different flat fee to prepare divorce documents. Ask the attorney if the flat fee covers everything. If not, request a breakdown of fees for any additional costs, such as filing fees and copying, etc.

Related: Click here to see a list of Estate Planning attorneys who write wills, trusts, etc., in Washington.

Retainer

Your attorney may ask you to make a payment up front before work starts on your case. This is known as a retainer, and it’s similar to a deposit. The attorney will then send a billing statement each month with details on how your retainer is being spent.