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5 Things Every Mother Needs to Know About Wills

Posted on: December 5th, 2016
As a mother, you naturally want to ensure your child’s future in every way. For many new mothers, infancy is a time for celebrating new life, and making a Will is the last thing on their minds. For others, the process of bringing new life into the world sparks intense feelings of wanting control and needing organization. Regardless of where you fall on that spectrum, you might be struggling to figure out what steps you need to take to protect your children’s future should the unthinkable happen. Here are five key things you should know about Wills. ...

10 Types of Trusts: A Quick Look

Posted on: July 18th, 2016
Considering the myriad of trusts available, creating an estate plan that works can seem daunting. However, that’s what we, as estate planning attorneys, do every day. We know the laws and will design a plan which addresses your specific situation. Here’s a look at the basics of ten common trusts to provide a general understanding. There will not be a quiz at the end. All you need to do when we meet is to share your goals and insights into your family and financial situation, and we will design a plan that best supports your situation. ...

4 Reasons to Protect Your Retirement Accounts Now

Posted on: April 26th, 2016
During your lifetime, your retirement account has asset protection, but as soon as you pass that account to a loved one, that protection evaporates. This means one lawsuit and your life-long, hard-earned savings could be gone. Fortunately, there is an answer. A special trust called a “Standalone Retirement Trust” (SRT) can protect inherited assets from your beneficiaries’ creditors....

4 Tips for Avoiding a Will or Trust Contest

Posted on: January 14th, 2016
A will or trust contest can derail your final wishes, rapidly deplete your estate, and tear your loved ones apart. But with proper planning, you can help your family avoid a potentially disastrous will or trust contest. ...

Heads Up: These States Will Usher in Changes to Their Death Taxes in 2016

Posted on: January 4th, 2016
In 2016, there are still 19 U.S. jurisdictions that collect a death tax at the state level: Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Tennessee (repealed this year), Vermont, and Washington. Even if you don’t live in one of these states, the state estate tax may affect you in the future since many people move from time to time. It may affect your beneficiaries, because they may live or move to one of these states. The following states will see changes to their state death taxes in 2016:...

What’s Hot in Estate Planning Right Now May Surprise You

Posted on: November 2nd, 2015
Estate planning has truly evolved over the past 20 years. Gone is the uncertainty about federal estate taxes and the absolute requirement for married couples to use complex trusts to minimize these taxes. But also gone is planning for the “traditional” family. In fact, today estate planning is more complicated than ever before....

National Estate Planning Awareness Week

Posted on: October 29th, 2015
In 2008 the National Association of Estate Planners & Councils (NAEPC), in conjunction with Rep. Mike Thompson (D-CA) and 49 of his colleagues, helped pass a law which declared the third week in October “National Estate Planning Awareness Week.” ...

2016 Estate and Gift Tax Predictions

Posted on: October 29th, 2015
Under current law the federal estate tax, gift tax, and generation-skipping transfer tax exemptions have become unified and are indexed for inflation on an annual basis. Since 2011, the exemption and tax rate have changed as follows:...

The Family Limited Partnership

Posted on: April 10th, 2015
A family limited partnership will let you remove your business, and any future appreciation on it, from your estate now, and still keep some control. It is especially useful when the business might otherwise have to be liquidated to pay estate taxes. Stocks, real estate or insurance can also be used instead of a business....

Business Owners: Have You Planned Your Exit?

Posted on: April 10th, 2015
You've worked hard building your business, but have you thought about what will happen when you are no longer there running the show? According to one study (Small Business Review, Summer 2001), only 30% of all family-owned businesses survive to the next generation; only 12% make it to the third generation; and a meager 3% are functioning into the 4th generation and beyond....

Three Ways to Transfer Your Family Business

Posted on: April 10th, 2015
For family business owners, estate planning is crucial to the success of the business. If you have not already drafted an estate plan that includes the succession of your business, begin today. Not only will early planning allow you to slowly implement the plan, thereby increasing its chances of success, but early planning will also ensure that your family’s main source of income is protected....

What You Need to Know About the FLLC

Posted on: April 10th, 2015
One popular yet confusing estate planning tool is the Family Limited Liability Company (“FLLC”). FLLCs are frequently created as part of an estate planning strategy used to facilitate gift giving to a person’s children and grandchildren. FLLCs are also used to shield assets from creditors....

Three Mistakes to Avoid When Planning the Succession of Your Business

Posted on: April 10th, 2015
Many small business owners are focused on running their business, rather than planning for its succession. By focusing only on the here and now, however, a business owner can set his or her business up for failure once it is time to relinquish control....

Basic Standards of Conduct for Partners in a Partnership and Members of an LLC

Posted on: April 10th, 2015
Statutorily Imposed Duties. State statutes provide that individuals associated with partnerships shall discharge his or her duties in good faith, with the care an ordinarily prudent person in the like position would exercise under similar circumstances and in a manner he or she reasonably believes to be in the best interests of the partnership....

Benefits of Single Member Limited Liability Companies

Posted on: April 10th, 2015
The limited liability company (LLC) form of entity is the appropriate form of conducting business for, many, if not most, sole proprietors. The primary reason for this is that this form of entity permits an individual to enjoy the benefits of limited liability and to continue to be taxed as a sole proprietor. Following is a brief summary of several factors we think should be considered by clients currently engaged in business as sole proprietors, a basic explanation of the LLC form of entity and a brief explanation of the process of forming an LLC....

What Is An LLC? Limited Liability Companies In General

Posted on: April 10th, 2015
What is a Limited Liability Company? Basically, a limited liability company (LLC) is a legal entity that became available under Washington law. An LLC is an unincorporated association that provides its members with the beneficial tax aspects of a partnership and the limited liability shareholders of a corporation enjoy. ...

Limited Liability: The Benefit of Conducting Business Operations as an LLC (Over Partnerships and Sole Proprietorships)

Posted on: April 10th, 2015
Sole proprietorships and partnerships can be simple forms of conducting business. The owners make all of the decisions relating to the business and are taxed on business income and loss as individuals, with no taxation at the entity level, as is the case with corporations. However, sole proprietors and individual partners in a partnership are personally responsible for the performance of all contracts and obligations of the business....

Asset Protection Considerations for Business Owners

Posted on: April 10th, 2015
Many business owners devote much time and energy “working in” their business to improve business operations and profitability; however, they often neglect to “work on” their business by not addressing certain asset protection issues. Business owners, particularly those owning their business in corporate form, should consider the following: 1) how to own C corporation or S corporation stock to minimize exposure to creditors, an “outside” asset protection issue; and, 2) whether to implement several basic business agreements designed to protect and even enhance business value from the “inside” of the corporation....

Keeping Assets in Challenging Times

Posted on: April 10th, 2015
I frequently get asked about asset protection; specifically about keeping certain types of personal property. About three times a week, the questioning commences with discussions about ATVs, boats, motorcycles and snowmobiles. ...

Inherited Retirement Accounts: 5 Things You Need to Know

Posted on: April 10th, 2015
Almost everyone has some kind of retirement account—whether a 401(k), IRA or pension—so proper estate planning for these funds is essential. From tax treatment to beneficiary designations, Matthew T. McClintock, J.D., VP of Education with WealthCounsel, answers your questions....

How to Leave Assets to Minor Children

Posted on: April 10th, 2015
Every parent wants to make sure their children are provided for in the event something happens to them while the children are still minors. Grandparents, aunts, uncles and other relatives often want to leave some of their assets to young children, too. But good intentions and poor planning often have unintended results....

How to Protect Yourself From Lawsuits

Posted on: April 10th, 2015
These days, lawsuits can happen to anyone, at anytime. In the United States alone, roughly 15 million civil cases are filed each year. For those who work in fields where lawsuits are common—doctors, lawyers, architects, business owners—getting sued seems inevitable. A study published in the New England Journal of Medicine found that 99 percent of physicians in high-risk specialties will deal with at least one malpractice suit before retirement age. ...

Qualified Personal Residence Trusts and Their Potential Use In Meeting Estate Planning Objectives

Posted on: April 10th, 2015
What is a Qualified Personal Residence Trust? A Qualified Personal Residence Trust (QPRT) is a trust that holds a personal residence for a term of years, allowing the creator of the trust (grantor) to remain in the residence. When the term of the trust ends, ownership of the personal residence transfers to the beneficiaries of the grantor. The grantor can retain the right to rent the residence after the term of the trust ends....

Gifting... An Easy and Satisfying Way to Reduce Estate Taxes

Posted on: April 10th, 2015
If you have a sizeable estate, you may want to consider giving some of your assets now to the people or organizations who will receive them after you die. Why? First, it can be very satisfying to see the results of your gifts -- something you can't do if you hold onto everything until you die....

Should I Put My Life Insurance Policies In My Living Trust?

Posted on: April 10th, 2015
Generally speaking, all titles and beneficiary designations should be changed to your living trust. But there are some exceptions, including IRAs and retirement plan benefits, and your attorney will be able to advise you about them. Regarding life insurance policies, it will depend mostly on the size of your estate—and if it will be subject to estate taxes after you die....

Understanding Who Should Be Beneficiary of Your IRA

Posted on: April 10th, 2015
How would you like to turn your modest tax-deferred account into millions for your family? Depending on whom you name as beneficiary, you can keep this money growing tax-deferred for not only your and your spouse’s lifetimes, but also for your children’s or grandchildren’s lifetimes. That can turn even a modest inheritance into millions....

Inherited Retirement Accounts: 5 Things You Need to Know

Posted on: April 10th, 2015
Almost everyone has some kind of retirement account—whether a 401(k), IRA or pension—so proper estate planning for these funds is essential. From tax treatment to beneficiary designations, Matthew T. McClintock, J.D., VP of Education with WealthCounsel, answers your questions....

Inherited IRAs No Longer Protected From Creditors

Posted on: April 10th, 2015
In a major decision, the Supreme Court ruled this past June that inherited IRAs are not considered protected retirement funds—and are thus subject to creditors’ claims if the beneficiary files for bankruptcy. ...

The Importance of Succession Planning

Posted on: April 10th, 2015
Many people think the purpose of estate planning is to make sure your assets and belongings will go to the people and organizations you want to have them after you die, with as little delay and costs (fees and taxes) as possible. And that is a correct purpose. But good estate planning goes beyond this—it plans for someone to take your place (a successor) when you are no longer able to perform your responsibilities due to death or incapacity....

Three Estate Planning Items Everyone Needs

Posted on: April 10th, 2015
Many people mistakenly believe that estate planning is only necessary for the wealthy. In reality, a basic estate plan is essential for everyone, regardless of income or net worth, because we all want to minimize confusion, unnecessary costs, and stress for loved ones after a death....

Estate and Distribution Planning For Retirement Benefits: A Planner’s Guide

Posted on: April 10th, 2015
1. Threshold Question. Whether life expectancy payout for issue is a desirable goal. If not, then payout is within 5 years, if before RBD (or if after RBD, then over participant’s life expectancy). 2. If Life Expectancy Payout for Issue Is a Desirable Goal. Separate into “inherited IRA” before December 31 of the year after participant’s death. Otherwise, the age of the eldest child is utilized for payout....

Funding Educational Needs of Children and Grandchildren

Posted on: April 10th, 2015
This memorandum summarizes several potential methods for funding the educational needs of others. Outright Gifts. Every individual can give up to $14,000 annually to any one or more persons without any gift or estate tax consequences. This is called the “annual exclusion from gift taxation.” Accordingly, money can be funneled to children or grandchildren for educational purposes by making outright gifts to the individual over a period of years....

Charitable Giving Strategies

Posted on: April 10th, 2015
Despite the recent downturn in the economy, it appears that members of community continue to be generous to their favorite causes. It is only by and through the use of donations that many charitable and other not-for-profit organizations are able to continue to provide services for and in support of the local community....

What Is A Revocable Living Trust?

Posted on: April 10th, 2015
Living trusts are sometimes promoted as a panacea for all estate, tax, and financial planning problems. But the living trust is only one of a number of options which may be used to achieve a person’s estate planning goals. The purpose of this pamphlet is to provide an overview of the advantages and disadvantages of a living trust and to suggest some appropriate uses of the living trust....

What’s the Difference Between Wills and Living Trusts?

Posted on: April 10th, 2015
Both Wills and Trusts are devices which you can use to provide for the distribution of your estate upon your death. Deciding whether a Will or a Trust best fits your needs depends on your circumstances. A living Trust is a popular alternative to the traditional Will, but you should weigh the advantages and disadvantages of each before deciding on one form or the other....

Is Disability Insurance Worth It?

Posted on: April 10th, 2015
From homes to body parts, Americans protect a variety of assets through insurance policies. When purchasing insurance policies, however, many Americans forget to insure their most important asset, the ability to work. Through disability insurance, a person can insure his or her paycheck. ...

Advance Directives/Living Wills are a Critical Component of Estate Planning

Posted on: April 10th, 2015
March 31, 2012 marked the seventh anniversary of the death of Terri Schiavo, the 41-year-old who succumbed after her feeding tube was removed as part of a very public legal battle between her husband and parents. As you may recall, Terri Schiavo was in a coma for nearly 15 years after she suffered cardiac arrest and sustained a brain injury. Her husband, Michael Schiavo, alleged that his wife would not want to live in her incapacitated state; she had no written instructions in place....

Estate Planning With Dementia on the Rise

Posted on: April 10th, 2015
Dementia is a syndrome that causes deterioration of cognitive function. As the baby boomer generation continues to age, so does the number of people who are affected by dementia. Perhaps more alarming, dementia is more commonly being diagnosed among individuals in their 50s. Although you may never have to deal with the challenges that a diagnosis of dementia can bring, it is still vital that you complete your estate plan early, while you have the mental capacity legally required to make estate planning decisions....

Estate Planning is a Woman’s Issue, Part Two: Married, Single and Charitably Inclined

Posted on: April 10th, 2015
Estate Planning is a Woman’s Issue, Part Two: Married, Single and Charitably Inclined Women have special estate-planning needs. In Part One we explained that, because women typically live longer than men, they need to plan for the possibility of incapacity in their later years. We also discussed that women as caregivers need to plan for the continued care of those who may be dependent upon them....

Estate Planning is a Woman’s Issue, Part One: Incapacity and the Caregiver

Posted on: April 10th, 2015
All women—regardless of marital status and career choices—need to understand estate planning and need to have a plan of their own in place. Here are some issues that are of special interest to women. Incapacity: Generally speaking, women live longer than men. As a result, there is an increased need to plan for physical and/or mental incapacity that can occur in later years....

Estate Planning: You Need an Incapacity Plan that Works When It’s Needed

Posted on: April 10th, 2015
Estate planning is not only about having a plan in place to deal with what happens after a loved one’s death, it is also about having a plan in place to deal with what happens if a loved one becomes mentally incapacitated. In this post you will learn: What happens without an incapacity plan; The essential documents for managing finances during incapacity;...

Living Trust Administration After Death of the Trustor

Posted on: April 10th, 2015
After the death of the Trustor of a living trust, or after the death of the surviving Trustor (if the revocable living trust is a joint trust), the following steps should be taken: Successor Trustee. Establish authority for dealing with the trust estate by determining the identity of the successor trustee, and that person’s right to act. Documentation for the successor trustee usually needs to be provided to third parties, such as banks, mutual funds, or brokerage companies....

Leonard A. Hagen, J.D., LL.M.
Sound Estate Planning, PLLC
152 3rd Ave. South, Ste. 107
Edmonds, WA 98020
Phone: (425) 967-7287
len@soundestateplanning.com

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