What Every Parent Should Know About Estate Planning: Part I

By November 5, 2014 No Comments

Last week, I had the pleasure of speaking about the basics of estate planning to a group of new parents (and their adorable infants) gathered together as part of a fantastic Seattle organization, the Program for Early Parent Support (PEPS).Infant feed in parent's hand.

My husband and I participated in a PEPS group after our son was born, and I previously volunteered with the organization as a group leader. PEPS brings together new parents who live near each other with babies born around the same time, to talk about their babies and their new lives in an informal setting. It is a wonderful resource, and a great way to start building a parenting community for new parents.

Are new parents too busy to be worrying about estate planning? For many people, having their first child provides motivation to move forward toward making an estate plan for the first time. But, as new parents are sometimes overwhelmed with additional demands on their time, it is easy to slip into thinking that estate planning can be put off until a later date.  I would argue that you will never have more time – there will always be something that keeps you busy – and having an estate plan is too important to put off.

Estate plans are for everyone. You are not alone if you’ve thought, “I’ll make a Will when I have an estate.” Surprise! You already have an estate. You don’t need to be heir of Downton Abbey to have an estate. Simply put, your “estate” is everything you own. Everything means, well, everything: land, furniture, cars, bank accounts, dot-matrix printers. My point here is that everybody has an estate – and it follows that everyone should have an estate plan. What if you don’t? Your family is left to muddle through to sort out what you owned and where it is, and Washington’s intestacy statute (lawyerspeak for “without a will”) determines who gets your stuff.

Here’s what happens to your stuff under that statute: If you are married or in a registered domestic partnership when you die, and have surviving children, your surviving spouse or registered domestic partner inherits all of your community property and half of your separate property, and your children would receive the other half of your separate property. If you do not have any surviving children or grandchildren but one of your parents or their lineal descendants is alive, your spouse or domestic partner would inherit three-fourths of your separate property, in addition to all of the community property, and the remaining quarter would go to your parents or your siblings. Your spouse or registered domestic partner would inherit your entire estate only if you do not have any surviving children, parents, or siblings. And, contrary to popular notions that “everything is community property because I’m married,” in reality the legal analysis of what is separate and community may be much more complicated, and a significant expense for your heirs.

If you are not survived by a spouse or registered domestic partner, then your children or grandchildren would inherit your estate. If you do not have any living children or grandchildren, then your parents inherit everything. If your parents do not survive you, then your siblings would divide your estate. If you are not survived by any siblings, your grandparents would inherit. And, if your grandparents are not alive when you die, then their lineal descendants would inherit your estate. And then? Your estate will escheat to the great State of Washington.

You can direct what happens to your stuff when you die – and make things far easier for your surviving loved ones – by having a properly executed Will. A Last Will and Testament is a document that states what you would like to happen to your assets after you die. A Will nominates a personal representative (sometimes referred to as an executor) to be responsible for paying your debts and distributing the rest of your estate to your beneficiaries. A Will may establish a number of different types of testamentary trusts (trusts created by a Will that become effective when a person dies), such as children’s trusts, pet trusts, family trusts, and trusts to minimize estate tax liability. And, for parents, Wills also nominate guardians for minor children.

If you are unhappy about having a Washington statute dictate how your stuff will be distributed, there is an alternative. Make a Will so you can decide who gets what proportion of your assets. It’s a simple as that. Of course, an estate plan is composed of more than just a Will. To be continued

This post is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting with an attorney.

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