Over the years, I’ve had thousands of initial consultations with prospective clients to discuss their estate planning. Approximately 80% of the people I speak with describe their estate planning needs as “simple.” However, often I find that this characterization is simply not accurate. Here are some factors that can, at least to some extent, complicate an estate plan:
- Testamentary Trust for Children: In crafting a testamentary trust for children, parents need to decide a variety of factors such as who will serve as the trustee and the alternate trustee, how the trust will be funded, the terms that the trustee must follow in distributing trust assets, and when the trust will terminate. Will each child be treated equally? Or does one child have unique considerations to take into account? The selection of a proposed guardian also comes into play here. These factors are initially worked through with legal counsel and then drafted, reviewed, and discussed.
- Disclaimer Trust for Tax Planning: Many prospective clients fail to recognize that their assets are sufficient to create Washington estate tax liability, and a disclaimer trust will be needed to reduce or eliminate that liability. In that event, the clients will need to understand the nature of their potential tax liability and the basics of how a disclaimer trust will work. They will need to select the trustees and any alternates, and then the trust will need to be drafted and reviewed.
- Committed Intimate Relationship: Many Seattle-area couples choose to cohabit rather than to marry. This choice can create complications in estate planning if a committed intimate relationship potentially exists. These couples may wish to enter into a cohabitation agreement before engaging in the estate planning process to clarify the ownership of assets. This issue must be addressed and worked through in the estate planning process.
Please stay tuned for part 2 of this blog series, which will discuss additional factors that may complicate an estate plan.
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