Preserving Your Wealth


Lifetime Transfers -

  • Gifts -   Subject to the limitation that gifts of Community Property should be consented to by both spouses, any person in entitled to give as much property as they want to any other person.  There is no  $11,000.00 limitation on gifts.  If a gift in excess of $11,000.00  is made to an individual, a gift tax return should be filed.  But there is a lifetime exemption which is now about $2,000,000.00 which covers gifts and estates.  In other words, until you have given away over $2,000,000.00 during you life, there will not be a gift tax.

  • Living Trusts - The law allows you to gift into trust any of your property.  There can be tax advantages to this if you give up control of the management and/or ultimate disposition.  One of the problems of a Living Trust is that the property involved must be titled in the name of the trust.  If done correctly this can also avoid the necessity of probate.  Although for a simple estate, probate is often less than $1500.00.

  • Life Estates -  One of the ways to transfer property, especially real estate is to reserve a Life Estate, that is the right to reside in the home for the remainder of your life, but give the Remainder interest.  This type of transfer has the effect of automatically transferring property from one person to another upon the death of the owner of the Life Estate.

  • Community Property Agreements - In the State of Washington, spouses can elect by agreement to declare their property community or the separate property of one of the spouses.  If property is declared as Community Property, you may elect that upon the death of one of the spouses the property automatically vests in the name of the other spouse without the necessity of probate.

  • Custom Transfers -  There are many ways to structure lifetime transfers to minimize taxes or other transfer fees and to maximize the security of effective control.   The best way to make sure you are doing the right thing is to talk over your plan with an attorney.


Transfers at Death -

  • Transfers by Will - One of the most common ways of transferring property upon death is through a will.  There are certain formalities to a will and a married person may not will more than one-half of the community estate to someone other than their spouse, but aside from these limitations a person may will their property to another person, a charity or set the property up in trust for children or other persons.

  • Transfers by Beneficiary Designation - Almost everyone has bank accounts, stock accounts, 401ks, Retirement Accounts or Insurance Policies that list named beneficiaries.  It is important to note that a designation of beneficiary in such an account will take precedence over the beneficial designation in a will.  For instance an older person may have three children and a will that gives her estate equally to all three, but for convenience of assisting her with paying bills, she has one of her children on her savings account where she has the bulk of her assets.  Upon death, the child on the account may inherit the bank account and all other assets will be divided into three shares.  This is not what the decedent wanted!

Allocating Management Power -

  •  Powers of Attorney - For reasons of physical incapacity, absence from the area or failing mental abilities, many people designate a trusted friend or family member to act for them with a Power of Attorney.  A Power of Attorney give the "Attorney-in-Fact" the right to transact business in the name of the property owner.  There is a general power of attorney which allows any transaction or special powers of attorney which are limited in scope.  In order to be effective after the incompetency of the property owner the power must specifically provide for this "durable" provision.  Powers of attorney can be effective immediately or you can provide that they take effect only upon incompetency.

  • Business Entities - For some people it may make sense to place assets in a family owned and controlled business such as a Corporation or Limited Liability Company.  In this way control and management can be allocated to all members or shareholders of the business.

Health Care Decisions -

  •  Directive to Physicians - The State of Washington has enacted legislation that allows a person to provide instructions to their physician that in the event of a terminal illness the physicians to withhold life sustaining procedures.  This document is often necessary if that is your wish because without the document the physician will be concerned with litigation for withholding those heroic procedures.

  • Heath Care Power of Attorney - A person can also give a specific Power of Attorney for Health Care which allows another person to speak for you in making a variety of health care decisions.