Preventative maintenance, like changing the oil every 5,000 miles, is often the best way to extend a vehicle’s usable life. Such maintenance prevents problems before they begin and gives a mechanic or other knowledgeable person a peek under the hood, where it’s possible to detect other issues.
Preventative maintenance is also the best way to keep estate plans current and avoid nightmare probate scenarios. Guitarist Jimi Hendrix died in 1970. As of January 2024, over 50 years later, his estate is still in probate court.
Given how life and lifestyle changes prompt most estate plan changes, regular estate plan reviews allow a knowledgeable professional, in this case, a King County estate planning lawyer, to peek under the hood and look for other potential problem areas. Below is a description of the documents an estate planning lawyer will examine during their review or create if you don’t have them.
The Components of a Comprehensive Estate Plan
The overarching purpose of an estate plan is to address the creator’s financial and emotional goals. Not only does an estate plan protect the estate plan owner’s beneficiaries once the owner dies, but it also protects the estate plan’s creator during life.
The components of a comprehensive estate plan, including a will, trusts (revocable and irrevocable), powers of attorney (medical and financial), and a living will, each serve these goals differently. Below is a description of each instrument.
Will
A will disposes of a testator’s (the person who makes a will) estate, except for assets held in trust, connecting the dots for questions of inheritance and succession. The problem: If a will isn’t updated correctly, it can create confusion after the testator’s death, or worse, it can be declared invalid.
Some people change a will’s terms by adding codicils. During probate, the codicil is read with the will. Codicils are limited to minor will changes but can be complex to execute, leaving room for errors. Multiple codicils may cause confusion or introduce conflicting terms, leading to additional ambiguity.
The safer option is to conduct a periodic estate plan review and create a new will that includes any desired changes. As a rule of thumb, reviewing an estate plan every three to five years or sooner if a life passage, such as a birth, death, marriage, or divorce, could cause a testator’s wishes to change is best.
Once the new will is executed, the old one and any copies of that document should be destroyed. Starting with a clean slate is an effective way to avoid confusion upon the testator’s demise.
Revocable and Irrevocable Trusts
Two purposes of creating a trust are to preserve privacy and to save money. Concerning privacy, an inventory is often part of the probate process, which could make beneficiaries feel uncomfortable if that inventory becomes public. For example, some people may not want to publicize that they have inherited expensive jewelry, classic cars, or other valuable collections. With a trust, a trust’s corpus (items) is exempt from the probate process.
The second purpose — saving money—is rooted in the type of trust an individual creates, revocable or irrevocable. A testator’s choice will depend on their goals. Control and taxation are the two most significant differences.
With a revocable trust, the trustee, who manages the trust at the direction of the trust’s creator, may add or subtract items at any time. The trustee and settlor (the person who makes a trust) can be the same person. Revocable trusts are also subject to estate taxes.
On the other hand, with limited exceptions, an irrevocable trust cannot be changed or revoked once it is created. An irrevocable trust can also provide tax benefits, serving as a potential tax shield. Before forming a trust, speak with a Seattle estate planning lawyer and tax professional.
Powers of Attorney
Powers of attorney assign decision-making authority if the document’s creator cannot make decisions of their own accord. Generally speaking, there are two types: a medical power of attorney and a financial power of attorney. The person assigned this authority need not be the same, and they often are not.
A medical power of attorney allows an individual to designate someone else to make medical decisions for them in the event of incapacitation. A financial power of attorney grants an individual the power to make financial decisions, including paying medical bills.
Relationships often change over time, so designations may also change. This is yet another reason to perform an estate plan audit.
Living Will
As people get older, their attitudes about death and dying often change. A living will allows individuals to communicate their end-of-life wishes to someone they trust to carry them out.
Married couples often appoint their spouse to this role. This is why revisiting an estate plan is especially critical when a divorce is on the horizon. Ask yourself: Would you want your soon-to-be ex in charge of this degree of decision-making?
Contact a King County Lawyer to Review or Create an Estate Plan
Updating or creating an estate plan can be daunting. However, with the guidance of an experienced estate planning attorney, the process can relieve a lot of unnecessary stress and worry about the future.
At Elise Buie Family Law, our team of King County estate planning attorneys has experience with all aspects of estate planning. Whether you are interested in creating an estate plan, need advice about the probate process, or require support to resolve an estate plan-related dispute, contact us today or schedule a time to speak.
