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Estate Planning

Estate Planning

AGREEMENT AS TO STATUS OF PROPERTY - a document that categorizes property owned by a married couple as community property -- generally categorizing all property acquired by the marital community, including the separate property of the spouses, as community property, but as distinguished from a Community Property Agreement, does not transfer the community property to the surviving spouse on the death of one of the spouses. It can also be used by a couple to delineate what is their community property and what is their separate property.


ANCILLARY ADMINISTRATION - a probate or other procedure which may be necessary in a state other than Washington if out-of-state property is owned at the date of death.

ASSETS/PROPERTY- The word "property" that is used extensively in estate planning  essentially means "assets", which is anything of value! This includes, vehicles, antiques, boats, RVs, ATVs, real property, cash, bank accounts, firearms, life insurance, IRAs, investment accounts, securities, bonds, household furnishings, jewelry, a business, accounts receivable, etc. The list goes on. Some assets are considered probate assets and some are nonprobate assets.  


BENEFICIARY - a recipient of estate, property, Trust property  life insurance policy proceeds,  retirement plans, IRAs and joint tenancy and transfer on death accounts.




CODICIL - a document that amends an existing Will.


COMMUNITY PROPERTY- all property, whether real or personal, acquired by a married couple after marriage, except property acquired after marriage by either of them by gift or inheritance. Each spouse has a one-half undivided interest in each and every item of community property. "Separate property" means the property of a spouse acquired before marriage and after marriage by gift or inheritance. Separate property can be converted to community property by co-mingling or specific transfer documents. 


COMMUNITY PROPERTY AGREEMENT- a document which defines community property and generally transfers the marital community property to the surviving spouse on the death of the first spouse to pass. A Community Property Agreement can also convert separate property of one spouse to  community property. 


CONSERVATOR  -also see Guardian below. A person appointed by a court to manage the financial affairs of a minor child, special needs child or adult, or of an adult who is unable to mange their financial affairs. Oftentimes the Guardian and Conservator are the same person, but can be separate if you wish. 

You may designate a guardian or guardians in a Will to express your preference to the court. 


CONTINGENT TRUST– typically, a Trust created by Will which only takes effect upon the happening of some event, commonly the death of both spouses or a single parent, at a time when children or other beneficiaries are under a certain age, for example age 25.  In such situations, it is generally felt that the property of the deceased parent or parents should not pass directly to children or other beneficiaries, but should be held for them until they reach a higher level of maturity.  Thus, until the selected age is reached, the property is retained in Trust with income and possibly principal used for their health, maintenance, education and support.


CREDIT SHELTER AMOUNT - also referred to as “applicable exclusion amount,” “applicable credit amount,” “tax-free amount” or the like, and refers to the value of property that can pass at death from the decedent to a person or persons other than a surviving spouse, free of federal or Washington estate tax.  This is currently $12, 920,00 federally (indexed for inflation) and $2,193,000 in the State of Washington.




DIRECTIVE TO FAMILY AND HEALTH CARE PROVIDERS- also referred to as a "Living Will,” is a document which tells  medical care providers and family members of a dying person of the dying person's wishes regarding the  withdrawal or withholding of some or all life-sustaining treatment of the dying person who is unable to communicate and whose death is imminent whether or not life-sustaining treatment is used.


DISCLAIMER TRUST-a form of Trust commonly created by provisions in the Will of a married person which is designed to lessen or eliminate the potential for federal and Washington estate taxes in tax-sensitive estates by being funded with the credit shelter amount. This Trust is created only by an election made by the surviving spouse within nine (9) months following the date of death of the deceased spouse. The provisions of the Disclaimer Trust provide for the distribution of all income from the Trust to the surviving spouse, at least annually, and for discretionary withdrawals of principal to allow the surviving spouse to continue to live in his/her accustomed manner of living. On the death of the surviving spouse, the Trust terminates and the remaining principal of the Trust is distributed pursuant to the terms of the Trust. The election, if made by the surviving spouse, is to disclaim some or all of the property which would otherwise pass to the surviving spouse from the deceased spouse’s estate. The property or amount disclaimed is placed in the Disclaimer Trust. Generally, Disclaimer Trust Wills are often recommended when the marital community estate is more than the credit shelter amount. The administration of this Trust is essentially the same as the administration of any other Trust. 


DURABLE POWER OF ATTORNEY - a document which provides for someone to have the power to act for a disabled or incompetent person ("the Principal") which means that the power holder or "Attorney in Fact" can generally manage and dispose of the assets  of the Principal for the benefit of the Principal during the period of disability or incompetence.  A Durable Power of Attorney terminates at the death of the Principal.


DURABLE POWER OF ATTORNEY FOR HEALTH CARE DECISIONS AND NOMINATION OF GUARDIAN- a power of attorney directed specifically and exclusively to health care decision making and related issues for a person who, as a result of illness or accident, is unable to communicate and give directions, but needs medical treatment.  A Durable Power of Attorney for Health Care Decisions terminates at the death of that person.


ESTATE TAX-FEDERAL  - refers to a federal excise tax, known as the estate tax, that is imposed on the transfer of all property that was owned by the decedent at death. The estate tax is levied simply because the decedent has died and property is passing to someone else.  The Federal estate tax rate is 40%.  Most transfers to a surviving spouse escape the estate tax by virtue of the unlimited marital deduction.  Transfers to someone other than a surviving spouse, for example, to children or a properly drawn Trust (such as a Disclaimer Trust) can be totally or partially saved from estate taxation by an estate tax credit. The credit equates to the estate tax on an amount which is referred to  the  “Credit Shelter Amount” (see above).

ESTATE TAX - WASHINGTON STATE refers to a Washington Estate Tax that functions very similar to the Federal Estate Tax with a Credit Shelter Amount currently $2,193,000. This is $10,727,000 less than the federal Credit Shelter Amount. However, the Washington estate tax rates  are graduated from 10% to 20%.

ESTATE TAX-SENSITIVE ESTATE-the ownership of property, either by an individual or husband and wife, including life insurance, joint tenancy with right of survivorship (JTWRS) and transfer of death (TOD) accounts, IRAs and qualified retirement plans, which has a value, after deducting all liabilities of more than the federal or Washington Credit Shelter Amount. 


FIDUCIARY- a person or institution in a position of trust (for example an attorney-in-fact, a trustee or personal representative) who manages money or property for another and who must exercise a standard of care in such management activity imposed by law or contract.


GUARDIAN- the person appointed by a court with the care and custody of a minor or special needs child or an adult incapable of effective management of their daily living. You may designate a guardian or guardians in a Will to express your preference to the court. 


PERSONAL REPRESENTATIVE- the name given to the person (in the past referred to as an "administrator" or an "executor") who is appointed by a court to administer the estate of a deceased person, generally having power to gather and inventory all assets, pay all bills and claims, and distribute estate property in accordance with provisions of the Will (or as provided by law where there is no Will) usually without court supervision.  The Personal Representative is also responsible to accounting for all estate income and disbursements. 


RCW 11.100.140- statutory provision found in the Washington Trust Act which requires (unless it is waived) that a Trustee give notice to the beneficiaries of a Trust before any sale, lease or disposition of substantial Trust assets, not in the ordinary course of the normal and usual activities of the Trust.  In our Will formats we generally waive compliance with this provision if there is a family relationship between the Trustee and the beneficiaries where the likelihood of abuse of power is remote.  On the other hand, if the Trustee were an institution, then we would more than likely require such notice and not waive this provision.


RCW 11.11.010(7)- a Washington statute which defines nonprobate assets  (nonprobate assets generally referring to property disposed of by means other than a Will).  Examples of non-probate assets which are referenced in this statute are bank or securities accounts held in joint tenancy with right of survivorship (JTWRS), transferable on death (TOD) bank or securities accounts. The purpose of this statute, subject to community property rights, if applicable, is to designate the non probate asset which may pass by a Will under RCW11.11.020.. The nonprobate asset affected by the Will must be in existence at the date of the Will. Not included are nonprobate assets such as real property interests held in JTWRS, rights or interests passing under a Community Property Agreement, life insurance policies, annuities, employee benefit plans, IRAs or bonds, or TOD deeds.


REPRESENTATION or RIGHT OF REPRESENTATION- a  statutory method of determining distribution in which takers are in unequal degrees of kinship with respect to the decedent, and is accomplished as follows:  After first determining who, of those entitled to share in the estate, are in the nearest degree of kinship, the estate is divided into equal shares, the number of shares being the number of the persons who survive the decedent who are in the nearest degree of kinship and the number of persons in the same degree of kinship who died before the decedent, but who left surviving issue surviving the decedent; each share of a deceased person in the nearest degree shall be divided among those of a deceased person's issue who survive the decedent and who have no ancestor then living who is the line of relationship between them and the decedent, those more remote in degree taking together the share which their ancestor would have taken had he or she survived the decedent.  By way of example, if a parent has three children and one of those children predeceases the parent and has children of his/her own at the time of the death of the parent, and if there is no surviving spouse, the parent's estate would be divided into three equal shares and the share of the deceased child would be divided equally among his/her children (the grandchildren of the parent). This statutory method applies to all cases where the decedent had no Will. It can also apply to distribution under a Will or Trust by specific reference to "representation" or "right of representation".


RESIDUE – in a Will, the term “residue” or “residuary estate” is used to identify the portion of an individual’s estate that remains after all specific devises and bequests have been made and all claims of the estate are satisfied. An effective Will must contain a residuary clause that gives the  residuary estate to a named beneficiary or several beneficiaries.  Not only does the residuary clause handle property that may have been overlooked or not otherwise disposed of, it can handle bequests that lapse due to the passing of the beneficiary designated to receive a specific devise or bequest.


SPECIAL DURABLE POWER OF ATTORNEY (To Facilitate Qualification Of Assistance)- a power of attorney directed specifically and exclusively to allowing the Attorney-in-Fact to take the necessary steps and deal with the necessary agencies to qualify the Principal to receive governmental and private agency benefits, namely, Medicaid, COPES and the like.


SPECIFIC BEQUEST/DEVISE - a specific bequest is a testamentary gift of a specific item or items of personal property such as artwork, vehicles, collectibles, and can also include interests in an entity or incidents of ownership in investment assets or accounts, that can be easily identified and distinguished from other personal property in an estate, and that is being gifted to a specific beneficiary before the distribution of the residuary estate. A specific devise is a similarly distributed gift but means  a gift of real property distributed outside of the residue of the estate.

TESTATOR/TESTATRIX- a term for the person whose Will it is. 

TRUST-refers to provisions commonly found in a Will or an independent document which provide for the ownership and administration of property by.a "Trustee" for the benefit of a spouse, child or some other persons. Usually income generated by the property held in Trust, and in some cases the principal, is distributed to the beneficiaries for items like support, maintenance, health and education. Upon the happening of a certain event, such as the beneficiary reaching a certain age (as in the case with minor beneficiaries) or  the death of the beneficiary, the property remaining in the Trust is distributed to the specified beneficiary or beneficiaries.

TRUSTEE-the person in charge of administering property placed in Trust for the benefit of the named beneficiaries. The powers and authority of a Trustee are governed by the provisions in the document or instrument creating the Trust and also by several lengthy and complex Washington statutes. 

UNIFORM TRANSFER TO MINORS ACT (UTMA)-a statute in Washington which sets forth the procedure that must be followed when making gifts or distributing estate property to a minor (a person under 18 years of age). Generally, the property must be distributed to a person of legal age referred to as a "Custodian" who may hold the property for the benefit of the minor. The property is to be expended for the benefit of the minor, and the remaining property distributed 



ADMINISTRATOR- a person appointed by the court to manage an estate when a person dies (decedent) without a Will (intestate) or the Personal Representative named in the Will fails to serve.

DECEDENT- a deceased person


INTESTATE- one who dies without a Will or with an invalid Will.

LETTERS OF ADMINISTRATION- a document issued by the Superior Court Clerk to an Administrator who has been appointed by the court to administer an intestate estate. 

LETTERS TESTAMENTARY- a document issued by the Superior Court Clerk to a Personal Representative  who has been appointed by the Court to administer a testate estate. 

PROBATE-a Superior Court process by which the property of the decedent is determined, administered and distributed. it also provides a process by which a decedent's debts and any income and estate taxes are paid. Different states have different procedures, statures and processes. Generally speaking, probate in Washington State is not an overly complicated process and is nothing to be afraid of!

NON-INTERVENTION POWERS-the process by which a Personal Representative or Administrator is permitted to administer a probate estate free of court supervision.

TESTATE-one who dies with a valid Will

Real Estate

Real Estate
Real Estate

CLOSING-the final stage in the purchase of real estate. This procedure occurs when the parties sign the final documents required to complete the sale according to the terms of the purchase and sale agreement, money is deposited with the closing agent and documentation pertaining to transfer of ownership is recorded. 


ESCROW-a legal arrangement in which a third party temporarily holds money or property until a particular condition has been met (such as fulfillment of a purchase and sale agreement).

PURCHASE & SALE AGREEMENT-this legally binding document states the terms and conditions of the transaction and obligations of the buyer and the seller. The importance of this document cannot be overstated and it is advisable to have an attorney draft it or at least review it before signing. 

TITLE- evidence of legal ownership of real property 

TITLE INSURANCE-offers protection against financial loss and expense of defending your title in court. Issued by a title insurance company. Some risks such as unrecorded easements or zoning and use restrictions may not be covered by title insurance. 

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