UNDERSTANDING ESTATE PLANNING DOCUMENTS

Last Will and Testament

A Last Will and Testament is the most common approach used by people to transfer property at the time of their death.  A Will typically names a Personal Representative to manage the estate debts, taxes, administration expenses, and provide for the transfer of his property on the death of the Decedent.  The essential requirement for an individual to be able to prepare a Will is that the individual must be 18 years old and have a sound mind. To be valid under Washington law, every Will must be in writing and signed by the Testator or Testatrix in the presence of two witnesses.

Power of Attorney

A Power of Attorney (POA) is a legal document where the Principal names an individual to be the Attorney-in-Fact for the Principal. The Attorney-in-Fact is authorized to act on the Principal’s behalf, and the POA can convey some or all of the powers of the Principal. A power of attorney can be general or specific, depending on the needs of the principal. For example, an individual can appoint someone as Attorney-in-Fact to for a specific legal or financial purpose, or even to make health care decisions. The POA can become effective immediately or only upon incapacity of the principal, depending on your wishes. An ordinary or traditional POA is effective only until the principal becomes incapacitated. A durable power of attorney becomes effective even when the Grantor becomes incapacitated.

Health Care Directive

A Health Care Directive, also known as a “Living Will,” is a document that specifies whether a person wants to receive life-sustaining treatment in the event he or she is dying from a terminal illness or is in a coma from which there is no reasonable hope of recovery.  Signed by the Principal as an expression of intent, a Health Care Directive becomes effective only upon determination by a physician that the terminal condition meets the criteria for activating the Health Care Directive.  A Health Care Directive can ensure that the wishes of the Principal are maintained in regards to future medical decisions.

Trusts

There are many kinds of trusts depending on the needs of the individual. A trust is a document that is created by the Grantor and the Trust document designates a Trustee. The Trustee will be the person or entity who will manage the trust assets  . 

• A revocable inter vivos (or living) trust created by declaration or by transfer to another are often preferred by property owners as means of holding and disposing of their property.  This type of trust is revocable by the trust creator and may allow assets to be passed to heirs without going through the costly process of probate.  The assets in a revocable trust will still be considered your own personal assets for creditor and estate tax purposes.

•  An irrevocable trust requires that a Grantor gives up all of his or her rights of ownership to the assets and the trust.  An irrevocable trust can't be modified or terminated without the permission of the beneficiary. The benefit of an irrevocable trust is that the Grantor may be relieved of the tax liability on the income generated by the assets, and the assets themselves may be protected from creditors of the beneficiary.

The above list of documents is not exhaustive and is intended only to demonstrate the types of documents that should be considered when contemplating a well rounded estate plan. Consult an estate planning attorney for information specific to your particular situation. if you have questions about estate planning or to schedule a consultation, please contact Renee Roman, Attorney At Law. She can be reached at (206) 878-8777 or by email renee@marineviewlaw.com.