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Kent Estate Administration and Probate Law Blog

Singer's estate reaches settlement over unpaid royalties

When Washington residents execute their wills, they appoint an executor to wrap up their affairs. The executor pays off debts and taxes and pays out the inheritance to the heirs according to the will. After a few months, the executor's work is typically done and the estate is settled. However, there are types of estate plans that call for much longer term estate administration.

One common reason to have a long-term estate administrator is to handle assets that will continue to accumulate wealth long after the death of the original owner. Trusts can fall into this category, but so too can other forms of property.

Trusts can manage an inheritance when the heir isn't ready yet

Many Washington residents want to leave an inheritance for their children, but fear that their children aren't capable of handling an inheritance responsibly. In some cases, the child may be still a minor, in other cases the child may have a developmental disability and in still others an adult child may have a gambling problem - there are many circumstances that could justify such fears. In these cases, a will that simply provides a lump sum to an heir could create as many problems as it solves.

Gossip reporters have recently had a field day with the news that the late singer Whitney Houston's 21-year-old daughter has married a 24-year-old man who was also raised by Houston. Family members are said to be have been opposed to their relationship, and their opposition appears to be tied in with a dispute over the singer's estate, which could be worth as much as $20 million.

Actor's death raises legal guardianship issues

Many Washington residents don't think about estate planning until they become parents. This is partly due to the fact that beginning a new generation makes one think about leaving a legacy behind, but it is largely due to a very practical concern: Parents must decide who will become legal guardians of their children if they should unexpectedly die while their children are still minors.

Recently, the mother of the late actor Paul Walker filed paperwork to become legal guardian of his 15-year-old daughter. Walker, known for his roles in the "Fast & Furious" movies, died in a fiery car accident last fall.

MLK heirs in legal dispute over father's personal items

Many Washington residents have been through the horrible experience of fighting with relatives over who gets to keep sentimental items after a loved one dies. These battles can tear a family apart at a time when everyone's emotions are still raw with grief, or even decades after the loved one's death.

One such battle now pits the heirs of the Rev. Martin Luther King Jr. against each other. The civil rights leader was assassinated in 1968, and his estate is controlled by his two sons. They want to sell their father's Nobel Peace Prize medal and a keepsake bible he owned to raise cash. His daughter does not want to sell the items, and the two sides have been engaged in a nasty legal dispute over what to do with them.

Trust protector: Someone to watch over the trustee

Family trusts are some of the most popular instruments in estate planning. When Washington residents set up a trust to take care of their family members after they are gone, they rely on the trustee's good judgment and skills to see that the trust property is cared for and the beneficiaries are treated well. However, a family trust can last a long time and a lot can happen before the time comes for the trust to be dissolved. Estate laws can change. The trustee can die. If the trustee is a business, such as a bank, the trustee can be sold. However, removing a trustee ordinarily requires a court order, often at the cost of a long legal dispute.

One way to avoid that cost is through the use of another party, sometimes known as a trust protector, who has certain rights over the trustee. Exactly what rights the protector has can depend upon the wording of the trust itself and the provisions of state law.

Washington state government struggles with public guardianship

Under Washington law, a guardian can make important decisions for those who can't make them on their own. Among these decisions are educational choices, whether to consent to medical treatment and managing finances. Parents are more or less automatically considered the guardians of their minor children, but a court must appoint a guardian when parents have died or when individuals are incapacitated by mental illness or dementia.

Generally, the court appoints a close relative or friend who has offered to take on guardianship duties, but when no such person is available the court may have to appoint a state employee. Unfortunately, Washington's funding of public guardians - which was already low - has been hit with a 50 percent budget cut. The program has been forced to stop accepting new wards and is trying to move current wards to private guardians.

Estate planning for those with non-citizen spouses

King County is increasingly a cosmopolitan area, with immigrants from all over the world making new homes here. Many of these immigrants end up marrying citizens and living happy lives as new Americans. However, marrying an American citizen does not automatically make a spouse an American citizen, and citizenship comes with certain rights that non-citizen spouses don't enjoy. Some of these may not become apparent until after one of the spouses dies.

American citizens have an unlimited marital deduction for assets they give to a spouse. This means that transfers of property from one spouse to the other aren't subject to gift or estate taxes. Many estate planning strategies are built around this deduction. However, the deduction is only available when both spouses are U.S. citizens.

Late actor's will highlights importance of updating

There are a lot of common misperceptions that prevent people from executing a will, and this can create a lot of problems for their families. Many Washington residents think that writing a will is something only for rich people, but in fact all types of families can greatly benefit from a valid will. Many Washingtonians think that they'll get around to writing a will when they're older, but of course none of us knows when our wills will be necessary. And many Washingtonians think that once they've executed a will they never have to update it. However, a lot can change in a person's life between writing the will and the person's death, and it can be important to make sure the will continues to represent the person's final wishes.

The will of the recently deceased Oscar-winning actor Philip Seymour Hoffman represents how some of these factors can work. The stage and film actor, widely regarded as among the best of his generation, struggled with heroin addiction and died from an apparent drug overdose at age 46. He left behind three children with his longtime companion.

Life insurance and Washington's community property law

One of the most common elements of estate planning is life insurance, but life insurance policies are often misunderstood. There's also an important aspect of Washington law that can make a big difference on how life insurance policies are settled.

Washington is a community property state. This means that both spouses have an equal claim to any income earned or property bought during the marriage. Typically, this would include proceeds from a life insurance policy, if community funds were used to pay the life insurance premiums. This would mean that even if the insured named someone other than the spouse as the beneficiary, the surviving spouse would still typically be able to take 50 percent of the proceeds.

Trusts are some of the most powerful ways to protect estates

The estate tax is one of the most misunderstood and feared aspects of estate planning. Its detractors call it "the death tax," as though it applies to all of us when we die. In fact, Washington state and federal estate taxes apply only to a very small fraction of estates. And even for those whose estates might be large enough to hit the threshold, there are many ways to lower the rate or avoid paying the tax altogether.

The requirement to file a federal estate tax return currently applies only to estates with total assets over $5,340,000. This represents somewhere around 0.14 percent of the population. (Washington's estate tax filing threshold kicks at $2 million. There are special provisions for estates that include farmland.) The top taxable rate for the federal estate tax is at 40 percent, but the fact is that very few estates end up paying anywhere near this rate.

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Jennifer C. Rydberg | Attorney at Law

Jennifer C. Rydberg
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Kent, WA 98030
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