Pleasants Law Firm Estate Planning Alternatives
Although we recommend everyone execute a Will and Trust, we recognize that this could still leave your heirs with probate legal expenses or complex trust agreements to follow. If you are leaving your property outright to a limited number of beneficiaries, we can often accomplish this through beneficiary designations, potentially avoiding the need for probate and saving heirs thousands of dollars of legal fees.
Beneficiary Designations
For financial assets, you just need to request a beneficiary designation from the financial institution. For Checking and Savings, this is often called Pay-on-Death. For stocks and bonds, this is called Transfer-on-Death. For Retirement Accounts, it is usually just a beneficiary designation. Many 401(k) and IRA administrators now allow you to enter this through your online banking account. By designating a beneficiary, that account will no longer be controlled by your Will, and is generally not required to go through probate.
Real Property
For real property in Washington state, we have adopted the Transfer on Death Deed. This is an updated deed to your house that lists your beneficiaries to receive your house automatically after your death. Just note that it may be subject to any liens (e.g. mortgage) or estate taxes due.
Community Property Agreement
Between spouses, you can transfer property by agreement on death using a community property agreement. This document is typically recorded after the first spouse dies, along with their death certificate, with the effect of transferring all real estate owned to the surviving spouse. If you have property that you do not want your spouse to inherit (e.g. inherited assets, vacation home that has been in one spouse’s family, etc.) those can be specifically exempted from the community property agreement. For spouses with Washington real estate, this is the quickest form of estate planning and is automatic on the death of the first spouse. Note that this document does not address what happens after both spouses pass away.