Halloween Estate Planning

Halloween can be a tricky time of year, with black cats and jump scares seemingly around every corner. You may be surprised by many things you see this October, but your estate plan should never be one of them! Picture the shock of discovering an estate plan still bearing the name of a former spouse, or learning that your most unreliable family member has been entrusted with decisions about your medical care should you lie in a coma.

Neither of these scenarios sounds quite like the type of trick that anyone would want to receive, especially compared to the treat of receiving a thoughtful, comprehensive estate plan that takes care of those worries. A recent study from Caring.com suggests that only 32% of adults have a Will established. In this blog, we hope to unveil “the man behind the curtain” and provide key insights into why it is truly important for every adult to have an estate plan completed.

Estate planning, without proper guidance, can feel like wandering through a haunted house—full of hidden traps and unexpected twists that could later haunt your loved ones. A common misconception we hear is, 'My estate isn't worth much, so why bother with a plan?' The answer is simple: imagine you win the lottery tomorrow, or, more tragically, you're involved in an accident that results in a valid wrongful death claim. In either case, your estate could suddenly be worth millions, and those assets would need to be distributed. Wouldn't you want to have a say in where that wealth goes—whether it be to friends, family, a charity, or your church?

Avoiding Frightening Pitfalls

Frightening Pitfalls

Without an estate plan, the State decides the hierarchy of who among your surviving loved ones or friends is able to serve as the personal representative of your estate. This means that it would be the Washington Court system, not you, deciding who will be in charge of your assets once you pass. For some, this is ok, for most, this may place unnecessary burdens on already stressed family members – or put those with little regard for integrity in charge. Your potential beneficiaries are the trick-or-treaters visiting the front door, will they be greeted with a treat, or the trick of disinheritance?

Communicating verbally with your loved ones while you are alive to pass down your wishes for the distribution of your estate is not a viable option for stating your wishes. The Courts cannot rely on any verbal communications to establish your wishes, so ensuring that you have a Washington State compliant will, is imperative. Keep in mind, emotions run high following the death of loved ones, and feelings can change – secure your plan in writing, with a Will. Arguments or disagreements over who receives what assets can lead to large investments in attorney fees and an overall delay in the distribution of the assets. Not only would this possibly erode family dynamics but likely reduces the overall value that everyone will be receiving.  

The Witching Hour: Why Halloween Is the Perfect Time for Estate Planning

Halloween is a time of mystery and unpredictability. It's a gentle nudge about life's inherent unpredictability. This makes it a fitting time to think about estate planning. Estate planning is about preparing for the unknown. It's about ensuring that your wishes are followed, even when you're not around to enforce them. So, this Halloween, amidst the costumes and candy, take a moment to think about your future. It's the perfect time to start planning your estate.

Concocting Your Estate Planning Potion: Essential Ingredients

Estate Planning Ingredients

Like brewing a potion, estate planning requires a mix of key ingredients to be effective. The first ingredient is a will. This important legal document specifies how you wish your assets to be distributed after your passing. Beyond your will, it's wise to consider establishing trusts, which can provide structured management of your assets both during your lifetime and after. Next, thoughtfully designate key roles, such as appointing a personal representative—someone entrusted to execute the terms of your will with care and precision. Additionally, don't overlook your digital footprint. Digital assets, including social media accounts, online banking, and emerging assets like non-fungible tokens, require proper handling to ensure a seamless transition.

The "Trusted Adult" Who Holds the Key to Your Candy

On Halloween, kids rely on trusted adults to help manage their candy, set limits, or even trade treats for better ones. Similarly, a durable power of attorney (DPOA) lets you choose a trusted person to manage your “grown-up candy” — your finances and important decisions — when you're unable to handle them yourself. Just like kids need someone who knows what's best for them, you need someone responsible and trustworthy to protect your assets and well-being.

Preparing Your "Emergency Candy Backup"

Trick-or-treaters often bring an extra bag just in case their primary one gets full or torn. A DPOA is like that backup plan—if something unexpected happens and you can't manage your financial or legal affairs, your designated agent is ready to step in and keep everything secure. It's all about being prepared, just like having that spare bag for candy emergencies!

Avoiding Tricks with a Solid "Candy Guard"

No one wants their hard-earned Halloween candy taken away or lost due to carelessness! The durable power of attorney acts like the "candy guard" — protecting your estate from potential problems or "tricks" that might occur if you're incapacitated. By designating someone you trust, you ensure that your financial "treats" are handled with care and not left vulnerable to mismanagement or fraud.

Healthcare directives are also important. They ensure your medical wishes are followed if you cannot communicate them. Consider including funeral and burial arrangements in your plan. This can save your loved ones from making difficult decisions during a time of grief. If you have minor children, your plan should include guardianship designations. This ensures that your children will be cared for by the person you trust most. Remember – regularly update your estate plan. Life circumstances change, and your estate plan should reflect these changes to ensure your wishes are consistently reflected.

A well-crafted estate plan is the best treat you can give yourself and your loved ones this Halloween.

Ensuring Your Legacy Isn't Haunted: Updating and Maintaining Your Estate Plan

So, you've treated yourself to an estate plan, but it has been a while, how do you know if changes are needed? Significant life events (marriage, new or lost family members, large investments, etc.) are all deemed as keystone moments that signify an excellent time to review and revise your estate plan. Outdated plans can have serious impacts on your loved ones following your passing. With a will that is out of date, you may be providing inheritance to ex-communicated loved ones, to the chagrin of your expecting close friends and family.

If someone has been married recently, make sure to update your plan to reflect any change in name they may have gone through to avoid any later confusion. Some exclusions are implemented on purpose, for a multitude of reasons. To properly exclude someone from your estate, it is not recommended to never mention them, but rather specifically include language within your Will that leaves them nothing. Washington courts will assume that any family names left out of the will were done so accidentally and will be automatically included among the heirs for distributions.

Ghosts of Past Mistakes:

The Example:

After their father's passing, three siblings—Anna, Ben, and Chloe—inherit their family home, each with an equal one-third share of the property. The home is part of their father's estate and holds sentimental value. However, when it comes time to decide the future of the property, a disagreement arises. Anna and Ben, who each hold one-third of the estate, want to sell the house, liquidate the asset, and move on. Chloe, the remaining heir, wants to keep the home, either to live in it or to preserve its sentimental value.

The Problem:

In this case, Anna and Ben represent two-thirds of the heirs, while Chloe represents one-third. Under Washington state law, heirs who jointly inherit property must come to a mutual agreement about what to do with it. If they cannot, this disagreement could lead to a legal standoff.

Possible Outcomes:

Negotiation & Buyout: The first and often most amicable option is negotiation. Anna and Ben could offer to sell their shares to Chloe, allowing her to keep the property while compensating her siblings for their interest in the estate. However, if Chloe cannot afford to buy out Anna and Ben's shares, this option may not be feasible.

Partition Action: If negotiations fail, Anna and Ben could file a partition action. A partition action is a lawsuit brought to force the sale of the property when co-owners cannot agree. In Washington, courts tend to favor economic efficiency over sentimental attachment. If the judge determines the property cannot be physically divided (as is the case with a single home), the court may order the house to be sold, and the proceeds split among the heirs according to their shares.

Court-Ordered Sale: Once the court orders the sale, the house will be sold, often on the open market. Anna, Ben, and Chloe would each receive one-third of the sale proceeds, regardless of Chloe's desire to keep the house. The court aims to resolve the deadlock fairly, with the majority of heirs who wish to sell often holding the advantage in such situations.

Key Takeaway:

This scenario highlights the importance of clear communication and estate planning. Without proper planning or provisions for such disagreements, family members may find themselves in legal disputes. To avoid such situations, individuals creating an estate plan can specify how property should be handled or allow for provisions like buyout options, reducing the potential for conflict after their passing. In this above example, if the parents were keen on keeping the property in the family legacy, providing the property specifically to Chloe and granting Anna and Ben a financial offset, could have been a viable solution.

Don't Let Probate Haunt You

Estates that do not have proper planning in place are likely to be subject to a lengthier, and thus costly, probate process. Probate, put simply, is the process of transitioning your assets, once you have passed away, to whoever you've intended to receive them.

Navigating the Washington probate process is like walking through a house of mirrors. At every turn, you think you're moving forward, but the path is distorted by legal complexities and procedural reflections. You may think you've found a clear way out, only to hit a wall of unforeseen delays or misinterpretations. Each step requires careful consideration, or you risk getting lost in the maze of paperwork, deadlines, and court proceedings. Only with precise guidance and patience can you find the true exit and reach a resolution. Speak with one of our probate attorneys to receive the peace of mind that your next step won't be into the mirror.

Don't let your estate plan turn into a spooky story! Contact us today to make sure your family gets all the treats they deserve, and none of the tricks.