Make a Plan for Your Assets

By Jenny Ling, Esq.

Two-thirds of Americans have never done any estate planning.  There are many reasons that people have for not completing this important step – they think they are too young; they figure their family will figure it out; they are concerned that estate planning is too expensive; or they figure estate planning is only for rich people.  But the reality is that estate planning is for everyone, no matter their age or wealth, and not having an estate plan can be traumatic and costly to your family.

Everyone, no matter their wealth or age, has an estate.  Your estate is comprised of everything you own – your car, home, other real estate, checking and savings accounts, investments, life insurance, retirement, and personal possessions.  No matter how large or small, everyone has an estate and needs to make a plan for it.  By having a plan in place, you will help your loved ones to have clarity of how assets should be distributed and managed. You will be able to provide certainty for them during an already difficult and emotional situation.

Washington’s intestate succession laws will determine who is entitled to your property.  This means that if you have no plan, the law, not you, will decide who will receive your assets.  Spouses and children are given top priority, followed by your closest living family members.  But what if your Spouse remarries and still doesn’t have a plan? Your assets may end up going to an unknown to you third party.  If you are single with no children, your assets would first go to your parents. But what if you are estranged from them?  What if they already have enough to live on, and you’d rather give to your siblings or niece and nephews?  You would need to have in a plan in place to make that happen. It is important to note that state intestacy laws do not apply to unmarried partners.  If you want someone outside of your family to inherit your property, having a plan is an absolute must.

If you have minor children and you die when they are minors, the will they will receive all of your estate in one lump sum when they turn 18 years old. It is usually not a good idea for 18-year-olds to have access to hundreds of thousands let alone millions of dollars, a heavy burden for most 18-year-olds.

If you have a child or grandchild with special needs, it is especially important to make a plan for them.  If you leave money directly to your child with special needs, it may make them ineligible for means tested governmental assistance such as Medicaid and Social Security Insurance.  A “special needs trust” allows a parent, grandparent or guardian to provide funds for a person with special needs to improve the beneficiary’s quality of life without disrupting support from governmental assistance programs.

Another risk of not having a plan for your assets is that your family may have to pay estate taxes on your assets after you die.  In Washington, if the value of your estate is above the state exemption ($3 million), you may be paying 10-35% in Washington Estate Tax. A well-crafted estate plan can help you use the exemption for both spouses to eliminate and limit the amount of taxes your estate would need to pay, and possibly prevent the liquidation of assets like the family home to pay the tax. $3 million may sound like a lot, but if you add up all of your assets – the equity in your home, any retirement or savings accounts, stocks or bonds, even your life insurance – you might be surprised by how much you actually have.

At The Law Offices of Jenny Ling, PLLC, we can help you create a plan that handles your assets in the exact manner you wish, taking into account all of your family dynamics, so your death won’t be any more painful or expensive for your family than it needs to be.  We offer flat-fee, customizable plans that fit your life so you can be certain that you family is taken care of, and that there is no question what your wishes are.  All our plans come with a free review every 3 years so that you can be sure that your estate plan grows with your life.

If you are concerned that you don’t have a plan or that your plan won’t work when your family really needs it, Contact Us for a complimentary 15-minute phone call to learn how we can help you Make a Plan.

Jenny Ling is a partner at the Law Offices of Jenny Ling, PLLC.  She focuses her practices on estate planning, business succession planning, business and bankruptcy.