Estate planning is for everyone. While most people do not like to think about death, it is a reality and typically unplanned. It is a lot easier on everyone, especially if you have a spouse, children and/or any relatives, if you draw up your own will and testament. I have been posted lots of information on estate planning, they should answer most of your questions. When you are ready to plan your estate give me a call and we will get started.
Tag Archives: Agriculture
Laws on Probate in Washington State
Don’t put your head in the sand, get your estate planned.
Washington law does NOT require a probate proceeding to be filed following death, regardless of whether the Decedent died with or without a Will (ie testate or intestate, respectively). Probate in Washington is entirely discretionary, and probably only a few percent of deaths in Washington result in a probate being filed. In Washington, if a probate is filed, it is because someone wants it to be filed, NOT because the law requires it. By far, the most common reason for probate is that the Decedent died holding:
- Any real property titled in his or her own name, or
- Personal property (usually a cash or securities account) titled in his or her own name whose value exceeds $100,000.
- There are other reasons, but the two listed above are the main ones.
Washington law, however, does require any last Will of a Washington resident Decedent to be filed promptly following death. RCW 11.20.010 requires any person having the custody or control of any will to file said will within thirty days after he or she shall have received knowledge of the death of the testator.
Estate Planning with a Trust
In a general sense, a trust is nothing more than an arrangement whereby one person agrees to hold property for the benefit of another. A “testamentary trust” is a trust created under a Last Will and Testament. As such, a testamentary trust becomes effective only after the testator’s death and, even then, the will must be approved and admitted to probate.
A “living trust,” is a trust created during the grantor’s lifetime, and the trust becomes effective immediately upon its creation. Living trusts are created by a written instrument, called a “trust instrument.” If the grantor is also the sole trustee, then the trust instrument is called a “declaration of trust,” because the grantor simply declares his or her intentions to the world. However, if someone other than the grantor is a trustee, then the trust instrument becomes a “trust agreement,” because the grantor and the trustee must agree on the terms of the trust.
Since living trusts are created during one’s lifetime, they can be either revocable or irrevocable. A “revocable trust” or “revocable living trust” is one that can be amended or changed, or even terminated, during the grantor’s lifetime. In almost all cases, it is the grantor who reserves this right when the trust is created. Even so, the trust becomes irrevocable upon the grantor’s death because only the grantor retains the right to amend or terminate the trust.
An “irrevocable trust” or “irrevocable living trust” is one that cannot be amended or changed, or even terminated, during the grantor’s lifetime. Once created, an irrevocable trust is governed exclusively by the terms of the trust instrument without any control by the grantor. For this reason, irrevocable trusts are created almost exclusively to obtain favorable income tax and/or estate tax benefits for the grantor.
Revocable Living Trust (RLT) are for the purposes of avoiding probate in Washington State, as well as making sure that assets are protected during life, protecting assets for certain beneficiaries, reducing estate taxes, avoiding will contests, etc. A RLT will only govern assets that are held in the trust or that are conveyed to it. This means that assets held in an individual name will be governed by the Last Will and Testament of the deceased. A pour-over Will will govern the assets and those assets will still be subject to probate, even though the RLT will govern their distribution. For a Trust to work, there must be a Will and and a funded RLT.
Estate Planning with an LLC
With the widespread adoption of limited liability company acts by state legislatures, limited liability companies (LLC) have become the business organization of choice for small closely held businesses. An LLC also provides tax advantages to transfer wealth from one generation to another while allowing the donor to maintain control over over the assets until death..
An LLC consists of members and managers. It can be structured like a limited partnership, with the members being passive investors and the managers actively managing the company. The concepts of wealth transfer are the same for LLCs and limited partnerships: The generation transferring the wealth (the parents) forms an LLC, making themselves both managers and members. The generation receiving the wealth (the children) are made members of the company. Initially, the parents hold all of the membership interest in the company along with the assets it represents. Over time, the membership interest is gifted to the children, within allowable gift tax amounts, and the parents retain the control of the company and its assets as the managers. LLCs can be structured to allow flexibility to accommodate income distribution issues and restrictions on transfers of interests
Laws on Estate Planning
In Washington, many laws concerning estate planning are found in Title 11 (Probate and Trust law) of the Revised Code of Washington (RCW). Additional laws may be found in Title 26 (Domestic Relations), Title 63 (Personal Property), Title 64 (Real Property), Title 68 (Cemeteries Morgues and Human Remains), Title 70 (Public Health and Safety), Title 83 (Estate Taxation). You may also need to look at Federal Laws.
White Bluffs Bladderpod.
Help request- for all of you along rivers or streams, please keep your eyes open for bladderpods. If you see a population, please let me know so we can have someone come check it out. Specifically looking for this plant along the Snake River into Idaho and Montana. Bladderpods need to look similar to the White Bluffs Bladderpod.
Ranch Life
As most of you know I am also a rancher and I got to spend part of the weekend on my horse, Shimmer, weaning the fall calves.
Ranch Life
As many of you know my family has a ranch where we raise horses and cattle. Last week we had an amazing foal that is a very rare color. Here she is. For more pictures you can see her on our ranch page, KT Ranch.
Boundary Line Adjustments- the ins and outs
Many times neighbors realize that what they thought was there boundary line really isn’t. With modern technology, it is much easier for lay people, and surveyors, to find an accurate boundary line for a person’s property. The invention of GPS is both good and bad, you now know what you really have. The Courts have had to deal with this issue by coming up with rulings to figure out who the true owner of a property is. Adverse possession and acquiescence are two of the main theories to try and determine the legal boundaries of a person’s land. These theories deserve articles of their own and won’t be dealt with in this article. Many times a fence line or other monument is what all property owners thought was the property line and it isn’t. In the Columbia Basin, due to the fact that parcels are not round, many times an irrigation circle will go over the property line onto a neighbors piece of property. In dealing with this issue, legislators passes WAC 458-61A-109 to deal with boundary line adjustments. Boundary line adjustments are a method to make minor changes to existing property lines between two or more contiguous parcels, meaning that the parcels must be touching where the change occurs. A few examples of common boundary line adjustments are the following, which are used as examples in WAC 458-61A-109:
(i) Moving a property line to follow an existing fence line;
(ii) Moving a property line around a structure to meet required setbacks;
(iii) Moving a property line to remedy a boundary line dispute;
(iv) Moving a property line to adjust property size and/or shape for owner convenience; and
(v) Selling a small section of property to an adjacent property owner.
Boundary line adjustments can’t be used in every case. For example if you are in the county and your lot size is already the minimum required, unless the neighbor agrees to do a trade, it may not be the answer you are looking for to remedy a problem. Boundary line adjustments must follow the legal requirements for your area, such as your county, city, and/or state. There is usually a process, and most times a surveyor is strongly advised, if not required. Most areas also require a deed to transfer the property that must be filed with the Auditor. To work up that deed, you may need an attorney. The survey map and the deed must both be filed, and any easements, restrictions, covenants, etc that go with the property need to be spelled out on said documents.
Boundary line adjustments are an excellent tool that are oftentimes overlooked as a solution. Cheaper than a lawsuit, easier than a lawsuit, and the answer that may save your relationship with your neighbor.
Here are the basics of a 1031
I have been working on 1031 exchanges for many years. Here are the basics of a 1031-
The key advantage of a Section 1031 exchange is the ability to sell a property without paying any capital gain tax, or depreciation recapture at closing, which allows the earning power of the deferred taxes to work for the benefit of the investor.
Although Section 1031 refers to “an exchange of property”, it does not require a simultaneous “swap” of properties. A Qualified Intermediary “QI” is an entity who enters into a written agreement with the taxpayer (“exchanger”) to acquire the exchanger’s rights and/or ownership interest in the property the exchanger is selling (“relinquished property”), and transfer such ownership interest into one or more properties of “like-kind” that the exchanger chooses to buy (“replacement property”). A QI is required by tax law and provides a safe harbor for the taxpayer (exchanger). I use Custom 1031 in Spokane as the QI for almost all 1031 exchanges that go through my office.
In other words, the intermediary is “assigned in” as the seller of the property during the closing process. It is the assignment that allows the seller to become an exchanger and, essentially convert an otherwise taxable sale and subsequent purchase of investment real estate into a tax-deferred exchange.
Because the intermediary is technically the seller who receives the sale proceeds, it prevents the exchanger from being in “actual or constructive receipt” of the proceeds; thus, there is nothing to tax.
Toni Meacham Attorney At Law 