Community Property Agreements,
Last Will and Testament,
Revocable Living Trusts,
Probate and Estates.
People are aware of their mortality, and choose to plan so that their goals and wishes are carried out after their demise. They are well advised.
Intestacy, when a person dies without a Will, provides a default succession plan that in many cases reflects a person’s wishes. Yes, its true that after searching for spouses, children, parents, brothers and sisters, nieces and nephews, cousins, basically any heir as we conventionally consider the term, a party’s estate may escheat to the State of Washington. I personally have never seen this take place, but it is on the books, if no heir at law is located under provision of RCW 11.04.015.
Community Property Agreements are the best way to transfer all assets of Decedent, whether of separate or community nature, whether acquired before or after marriage, into the sole and separate ownership of surviving spouse.
The Last Will and Testament is the historic and typical manner in which Decedent’s assets and debts are administered by their Personal Representative, the gender neutral term for Executrix/Executor. Surprising to me though, the party making the Will is still nominated the Testator, or Testatrix. When the Estate, (separate from community property concerns) is under $ 2,000,000 at the Washington State level, and $ 5,430,000 at the Federal level, (and these change), no Gift or Estate Tax is due, (absent lifetime use of the Decedent’s Unified Tax Credit, those gifts made in excess of the Annual Gift Tax Exemption, presently $ 14,000 per year). Short way to say it, most heirs pay no Estate Tax.
Probates are the administration of a Will. If assets remain in the Decedent’s name, the Will is admitted to Probate, Letters Testamentary are Ordered Issued by the Clerk, and the Personal Representative has full transfer authority at any bank, title company, investment house, wherever. An advantage to Probate is the Four Month Notice to Creditor statute, which upon publication in a newspaper of general and legal circulation in the County of Death, any Creditor must come forward, and within that time, if ever, file and serve a Claim upon Personal Representative. The PR may reject wrongful Creditor Claims. Thereafter, the Net Estate is free of such claims. I am heartened by the number of families and heirs that pull together for smooth succession. Although everyone has heard of Probates gone Wrong, it doesn’t really seem to happen all that often. I personally think the Will is the best succession product.
Revocable Living Trusts are a succession/management device that allow the Trustor/Grantor to re-title assets into the Trust’s name, it now owns the asset. However, the Trustor typically nominates themselves as Trustee, so they can still buy, sell or manage the assets owned by the Trust. When that party passes, the (Successor) Trustee steps in and follows the steps provided for in the Trust, typically conveying it out of the Trust into the ownership of natural persons, such as the adult children of decedent. The advantage is that all the re-titling of the assets occurred during life, so its relatively easy for Successor Trustee to complete the Living Trust’s prominent goal, to convey assets without probate. Another use is to centralize management. The uses of these Trusts are widely varied.