Will Provision Overrides Trust

Posted on April 4, 2012 by John Hugg

In Manary v. Anderson, 2011 WL 5127615, Wash. App (Div. 1, 2011) the decedent’s Will contained a provision leaving property to party “A”. This Will provision conflicted with a similar provision in a trust leaving the same property to party “B”. Because the Will made a specific reference to the property in question and was executed after the trust document, party “A” prevailed. This may have been the correct result as there was evidence to show this is what the decedent wanted. However, the case is a good example of how someone can easily make a mistake and inadvertently preclude someone from receiving an inheritance. This is just one reason why working with an attorney can be beneficial when creating or revising your estate plan.

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New Provisions for Revocable Living Trusts

Posted on March 26, 2012 by John Hugg

Recent changes to Washington’s law on trusts and estates codify certain aspects of revocable living trusts. Here are a couple of the new additions to the statute:

A person must be at least 18 years old and of sound mind to create a revocable living trust.

The statute also sets out a 24 month time period to contest the validity of the trust and shortens that time period to 4 months if the trustee gives the proper notice.

Such a trust may be amended or revoked as set forth in the trust agreement. However, if the trust fails to address this issue, the statute allows a writing signed by the trustor to be used as an amendment or revocation. A Will written after creation of the trust will meet the definition of a writing that can amend or revoke the trust. Therefore, you will want to be careful that your subsequent Will does not frustrate the disposition of your assets as originally intended with the revocable living trust.
 

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New Trustee Notice Requirements

Posted on March 21, 2012 by John Hugg

Washington State recently revised portions of its trust and estate statutes. The new law makes explicit a trustee’s duty to provide notices to certain parties. Those parties, normally current and remainder beneficiaries of the trust, must be notified of the following: the existence of the trust; the identity of the trustor (maker of the trust), the trustee’s contact information; and that a beneficiary has the right to request information necessary for the beneficiary to enforce his or her rights under the trust.

The notice is required to be given within 60 days of the trustee’s appointment and applies to irrevocable trusts created on or after January 1, 2012, and revocable trusts that become irrevocable after that date.
 

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Brashenomics

Posted on March 19, 2012 by John Hugg

We’ll be talking trusts and what you can do with them on Tuesday’s edition of Brashenomics. Tune in to KKNW AM 1150 at 4:00 on March 20, 2012 for more.

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Upcoming Events

Posted on February 13, 2012 by John Hugg

On Monday, February 20, I will be answering questions about estate planning issues on Brashenomics, a local talk radio program on KKNW A.M. 1150. The show is scheduled to air at 3:00 p.m.

The following day, I am scheduled to give a seminar on Advance Directives and End-of-Life issues at Brittany Park in Woodinville, Washington.
 

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Clearer Trustee Duties

Posted on December 2, 2011 by John Hugg

Effective January 1, 2012, a number of changes to Washington law pertaining to trusts and estates will become effective. One of these changes is the codification of a trustee’s duty to notify the beneficiaries of the existence of a trust and keep those beneficiaries informed regarding the trust’s administration. This rule will apply to irrevocable trusts established after December 31, 2011, and to revocable trusts that become irrevocable after this date. Another important component to this change is that the maker of a trust, otherwise known as a “trustor”, cannot relieve the trustee of this duty. Previously, the law has been a bit unclear as to what, when and to whom information about a trust and its assets has to be provided.

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Advance Directives Seminar

Posted on October 31, 2011 by John Hugg

On Wednesday, December 14, 2011, at 10:00 a.m., I will be conducting a seminar on Advance Directives at the Mill Creek Senior Center in Mill Creek, Washington. The class focuses on all aspects of Powers of Attorney, Living Wills and the POLST form. The program is sponsored by Evergreen Healthcare.

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Explain Why You Gave One Child More

Posted on September 15, 2011 by John Hugg

A number of my clients leave different amounts to children via their Wills. In my experience, this occurs most often after parents give one of their children money to help out while they are alive, but not all children. The thought behind giving more through a Will is to give the child who did not receive money while mom and dad were alive a little more at death to equal things out. Of course there can be other reasons for unequal bequests including estrangement or other non-financial issues. A recent Wall Street Journal article notes that when this situation occurs, you should take steps to reduce the likelihood of conflict. Two good ways to reduce the likelihood of a Will contest are writing or videotaping an explanation of the unequal distribution and, under certain circumstances, taking additional steps to show a clear mind when you signed the Will.

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Is Gifting Right For You?

Posted on September 12, 2011 by John Hugg

For many people, making large gifts to children and grandchildren may not be the wisest action to take. For example, if you are a married couple aged 70 with a nicely sized combined estate, gifting may ultimately do more harm than good. Remember that if you are now on a fixed income, inflation will significantly eat into your purchasing power over time. Also, certain costs have historically increased far faster than the overall rate of inflation. Long term care is one such cost. Medical expenses are another fast rising cost. So before you give everything away, think about how much money you will really need to live on during your golden years.

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Business Succession Planning Tips

Posted on September 4, 2011 by John Hugg

If you are planning to pass your business to your children here are some tips and options you may want to consider:

  • Carefully evaluate the interest and desire of the next generation to work in the business. If a child lacks the necessary interest and desire he or she will certainly fail to maintain the company.
  • Turn over control slowly and over time. This will enable the second generation to become familiar with the business and the challenges of running it, allow children to make mistakes without jeopardizing the enterprise and allow you to make course corrections if the chosen heir is not working out.
  • Structure a transfer that requires the next generation to “earn” the company. Set up a purchase over time so you receive much needed cash for retirement, the child or children get the business while learning it has to be earned – it is not merely a gift.
  • Consider having family members who do not participate in running the business be creditors rather than owners. Non-participating family can receive a stream of income while not negatively affecting management of the business.
  • Communicate with all family members about what you are doing and why.
     
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