chapter 7 2:15 – 3:15pm drafting wills for families

CHAPTER 7

2:15 – 3:15pm

Drafting Wills for Families including Guardianships and Trusts

for Minors and Special Needs

Christopher M. Henderson Dussault Law Group

PowerPoint distributed at the program and also available for download in electronic format: 1. Drafting Wills for Families Electronic format only: 1. Drafting Wills for Families Electronic versions of these documents are available on the KCBA website:

https://www.kcba.org/cle/EventDetails.aspx?Event=51013

5/6/2013

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Drafting Wills for Families

Presented byChris Henderson

Dussault Law [email protected]

www.dussaultlaw.com

The Basics

• Explaining The Last Will and Testament to a Family Clienty

• Gathering Client Information

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Guardians

• Minors

• Qualification of Guardian• Qualification of Guardian

• Incapacitated Person

• Standby Guardian

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Financial Management

• UTMA

Age of Distribution–Age of Distribution

–Advantages and Disadvantages

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• Trust for Minor

Ascertainable Standard–Ascertainable Standard

–Spendthrift

–Distributions / Termination

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• Selection of Trustee/Custodian–Coordination with GuardianCoordination with Guardian

–Qualities of Trustee

–Alternative Trustee Arrangements

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Personal Representative

• Qualities

N I t ti P• Non‐Intervention Powers

• Bond Waiver

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Reciprocal Wills

• Revocable by Default

• Agreement not to AmendAgreement not to Amend

• Considerations for Drafting

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General Provisions

• Revoking Prior Wills

N i I t t t H i• Naming Intestate Heirs

• Predeceasing Heirs

• Disposition of Personal Property

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Checklist

• Payment of Debts and Expenses

• Payment of Taxes

• Specific Bequests

• Distribution of Remainder

• Attestation & Witnesses

• Self‐Proving Affidavit

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Other Common Scenarios

• Pet Trust

N Citi S• Non‐Citizen Spouse

• Other Spousal Trusts

• Multiple Trusts in One Will

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Thank You!

Questions: Chris Henderson

[email protected]

5/6/2013

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Disclaimer & Notice• This presentation and written materials are designed to provide

accurate and authoritative information in regard to the subject accurate and authoritative information in regard to the subject matter covered. They are provided with the understanding that the presenters are not engaged in rendering legal, financial or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

• Please keep in mind all written materials and power point slides are the intellectual property of the Dussault Law Group. These materials may not be distributed without the express written consent of the authors.

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DRAFTING WILLS FOR FAMILIES

I. The Basics Clients contact attorneys to prepare a will with a wide range of expectations. Many

clients have little or no understanding of what they need – they have come to an attorney because

they have been advised to do so by trusted friend/family member/professional or because they

have a sense this is something people need to do when they reach a certain age or level of

financial security. Others will arrive thoroughly familiar with how wills work; they may have

executed several with prior attorneys and are coming to you for an update based upon a recent

change in their circumstances, the law, or simply the passage of time. It is the attorney’s

responsibility to not only prepare documents for individuals with this wide range of

sophistication, but also to ensure that they understand the documents the attorney is preparing on

their behalf.

A. Explaining The Last Will and Testament to a Client A last will and testament addresses four major areas of concern for the family client:

naming the appointed guardians to care for minor children or disabled individuals; establishing

how to manage assets left behind for children or others; preserving wealth by reducing or

eliminating taxes; and to providing direction in administering the client’s estate.

It is essential that the client understand several constraints as well, primarily that the will:

is revocable until death, serves no purpose until death, and does not exercise absolute control

over any of the above mentioned issues. For each of these issues, clients (and attorneys) should

also understand what happens if they die without a will.

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The first thing clients should understand when considering how a will controls the

transfer of their wealth is which assets they may control through the terms of their will. Assets

generally subject to transfer by a will are called “probate assets.” The most common probate

assets are personal property, bank and brokerage accounts, any property interest in which the

person is the sole owner or a tenant in common. Commonly owned assets that are not controlled

by a will include assets subject to joint tenancy (or bank accounts) with right of survivorship,

payable on death or trust bank account, a trust of which the person is grantor and that becomes

irrevocable only upon the person's death, community property agreement, individual retirement

account, a life insurance contract, or an employee benefit plan.1 However, most assets with a

beneficiary designation can be controlled by the will if the beneficiary is the client’s estate.2

B. Gathering Client Information Client information is principally gathered in two ways – through an intake form and an

initial client conference. An effective intake form will be used as a filter for business purposes,

as a guide for the initial client conference, and as a roadmap for the attorney and paralegals in

drafting documents. It should include sufficient questions for the attorney to determine if there

are additional issues that need to be explored during drafting – such as whether the estate will be

subject to state or federal estate taxes, the extent of assets which are nonprobate, any significant

1 Importantly, some of the aforementioned assets can be controlled by a will under certain conditions. Confusingly, those assets are defined as “Nonprobate assets” in RCW 11.02.005(10). The assets which under no condition can be controlled by the provisions of a will are described as “not” nonprobate assets under the same definition. In turn, RCW 11.11.020 (often referred to as the “Superwill” statute) describes the circumstances under which a will can control certain nonprobate assets. A more thorough discussion of this issues falls outside the scope of this presentation, but for a recent discussion in the courts, see Manary v. Anderson, 292 P.3d 96 (Wash. 2013). 2 Note that this brings these assets into the estate and may have other unintended consequences.

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disparity in the value of a couple’s separate property, any unusual or especially important

property interests and any heirs to be disinherited.

Clients very often come with an intake form that is precisely one half complete. They

have either been attentive to issues that are not principally financial in nature (personal

representative, guardians, trustees, specific bequests) or they have been attentive to those that are

(e.g. the extent of their estate, the form of ownership and value of each asset, names of financial

planners, accountants and other professionals). An effective intake form guides the client

conference even if incomplete by providing the attorney with insight into what issues the client is

interested in and thinks he/she understands, and what issues the attorney may be explaining for

the first time.

II. Guardians for Children and Disabled Beneficiaries It is very common for clients to have their first will prepared when their primary concern

is not how assets will be distributed, but who will care for their minor and/or disabled children.

The decision may be a substantially (and mechanically) different one for minors and for disabled

children.

For minors, RCW 11.88.080 permits a person to name a guardian for their minor children

by will or durable power of attorney. The person may be required to furnish a bond, pursuant to

RCW 11.88.100 and RCW 11.88.110, but the court is required to “confirm the parent's

nomination unless the court finds, based upon evidence presented at a hearing on the matter, that

the individual nominated in the surviving parent's will or durable power of attorney is not

qualified to serve.3” For most people, the primary consideration is simply that their children be

3 RCW 11.88.020 describes the qualifications for service. Notably, it excludes anyone who is:

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raised in a loving home with people whose values reflect, as much as possible, their own. It is

often helpful to ensure that clients have also considered the following the specific issues:

(1) the age of the guardian when the children are teenagers (e.g. people who want

to name their parents are advised to also name back-ups and perhaps even a

plan to transfer guardianship as the children get older);

(2) where the guardian lives;

(3) the guardian’s financial ability to serve and the guardian’s support network;

(4) the current relationship between the guardian and the children; and

(5) if the guardian will raise the children in a specific religious tradition.

For individuals who are already guardians of an adult found to be incapacitated as to their

person or estate under RCW 11.88, the situation is different, although the above considerations

remain. In this case, a guardian named in the will serves as a recommendation to the court,

however the court would undergo the appointment process specified in RCW 11.88 for the

appointment. Moreover, there is a separate process by which successor guardians are expected

(a) under eighteen years of age except as otherwise provided herein; (b) of unsound mind; (c) convicted of a felony or of a misdemeanor involving moral turpitude; (d) a nonresident of this state who has not appointed a resident agent to accept service of process in all actions or proceedings with respect to the estate and caused such appointment to be filed with the court; (e) a corporation not authorized to act as a fiduciary, guardian, or limited guardian in the state; (f) a person whom the court finds unsuitable.

RCW 11.88.020(3) also provides that guardians must complete certain training requirements.

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to be named under RCW 11.88; a standby guardian can be named by the guardian by

designation. The standby guardian serves as back-up when the guardian is unavailable, and:

shall have all the powers, duties, and obligations of the regularly appointed guardian or limited guardian and in addition shall, within a period of thirty days from the death or adjudication of incapacity of the regularly appointed guardian or limited guardian, file with the superior court in the county in which the guardianship or limited guardianship is then being administered, a petition for appointment of a substitute guardian or limited guardian. RCW 11.88.125(1).

Note that naming couples in either scenario can be problematic if a couple later divorces.

If possible, it is best to name the primary person as guardian alone, or account for the possibility

of divorce in the document.

Sample Language for Naming Minor Guardians:

In the event that my spouse, _______, predeceases me, and _______ has yet

reached the age of majority (age 18), I direct _______ to serve as Testamentary

Guardian of the person or estate of _______ until _______ shall reach the age of

majority.

Sample Language for Guardians for Disabled Beneficiary:

If I should die with my spouse not surviving me and having already obtained a

Guardianship or Limited Guardianship for _______ and without having

designated a Standby Guardian for _______, then I designate _______ as Standby

Guardian and request that _______ petition the court to be appointed as Full or

Limited Guardian of the person and/or estate of _______.

If I should die with my spouse not surviving and not having already obtained a

Guardianship or Limited Guardianship for _______, or upon the date said child

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attains eighteen (18) years of age, then I request that _______ petition the court to

be appointed as Full or Limited Guardian of _______.

III. Financial Management for Minors and Disabled Beneficiaries

A. Uniform Transfers to Minors Custodial Account There are several ways to manage funds distributed to children. The easiest way to do so

is simply to direct funds to a custodial account under the Uniform Transfers to Minors Act, RCW

11.114. Doing so allows the testator to indicate the purpose for the funds, and empowers the

custodian similarly to a trustee with the same responsibilities and some specific additional

specific responsibilities. See, e.g., RCW 11.114.120 “Care of Custodial Property”. This vehicle

may be used for anyone considered a minor under the UTMA – anyone under 25 years old.

RCW 11.114.010(11). By default, a transfer made to a custodial account for the benefit of minor

by will, under the UTMA, be distributed out of the custodial account at age 21. See RCW

11.114.200(1)(a), RCW 11.114.050. However, this can be extended to 25 at the election of the

testator. RCW 11.114.200(2). The principal advantage of using these accounts is that they are a

simple, inexpensive means of transferring money for a minor’s benefit with all of the protections

of most trusts. The custodian: has the responsibilities of a fiduciary; may be ordered by the court

to obtain a bond; and may be directed to make distributions only for a certain purpose. The

principal disadvantage is their lack of flexibility – for most clients, that lack of flexibility is

particularly important in terms of distributions.

Sample UTMA Custodial Account Language

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If _______ is under <appropriate age, twenty-one (21) or twenty-five (25)> years

of age at the time of distribution, _______’s share shall be held in a custodial

account under the Uniform Transfers to Minors Act, as codified in RCW 11.114,

to be held and applied on _______’s behalf until _______ reaches <appropriate

age, twenty-one (21) or twenty-five (25)> years of age. The custodian may make

discretionary distributions for the health, education, welfare and support of the

beneficiary. I nominate ______________ of ______________, ______________,

as custodian. If ______________ is unable or unwilling to act as custodian, then I

nominate ______________ to serve as successor custodian.

A. Trusts for Minors A Trust is an separate entity that possesses assets managed pursuant to the terms of a

Trust Agreement. A trust has three parties: the Trustor (who funds the trust), the Trustee (who

manages the trust), and the beneficiary(ies) for whose benefit the trust was created. Within this

broad framework there is tremendous flexibility in how a trust operates, and how each of these

roles is managed. A common use for trusts is to be established at death by a will (a testamentary

trust), often the benefit of a child or other beneficiary. There are a number of common issues to

consider when drafting a trust for a minor beneficiary.

First, under what conditions should trust resources be used for the benefit of the

beneficiary. These conditions must be delineated by “an ascertainable standard,” creating a

definite obligation for the trustee and placing certain kinds of distributions outside the trustee’s

control. However, a trustee may be given broad discretionary authority to determine whether a

particular expense falls within the standard described in the trust agreement. A common

standard for a minor trust would include support, maintenance, education, health and care. A

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client may wish to permit other expenses as well, that might not fall under any of these

categories, such as travel or the down payment on a home. You should ensure that all intended

distributions are expressly permitted by any trust incorporated into the client’s will.

Sample Minor Trust Purpose Language

Purpose: The express purpose of this Testamentary Trust is to provide care,

support, maintenance, education, and health for ______________. The Trustee

shall have the discretion to use so much of the income or principal as the Trustee

deems appropriate to meet the beneficiary's needs after consideration of the

beneficiary's other income and resources. The Trustee may, but shall not be

required by any agency, party or judicial entity to, invade principal to meet the

beneficiary's needs. Such invasions are to be made solely at the discretion of the

Trustee.

It is also most often appropriate to include protection from creditors in a trust prepared

for a minor. This protection is commonly referred to as a “spendthrift provision.” The purpose

of the spendthrift provision is to ensure that the beneficiary does not find a way to create

obligations on the trust which essentially allow him/her to leverage the value of the Trust by

anticipating its eventual distribution. If a beneficiary is able to do so, the purpose of the trust –

protecting the assets from a child’s unwise spending decisions – may be frustrated.

Sample Spendthrift Language.

The beneficiaries shall have no interest in either the principal or income of this

Trust until such income or principal is actually distributed to any beneficiary. The

assets of this Trust shall in no way be assignable or alienable by or through any

process whatsoever. The assets of the Trust shall not be subject to garnishment,

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attachment, levy, or any other legal process of any court from any creditor of any

beneficiary, nor shall the assets be an asset in any future bankruptcy of any

beneficiary.

The last major component of a trust for a minor beneficiary is a termination provision. While

there is enormous flexibility in determining the appropriate termination provision for the

particular client, clients often express an interest in distributing a substantial portion of the

principal held by the trust at several different ages. This can be accommodated with the

following language, or something similar:

Sample Minor Trust Staged Distribution Language.

The term of this Testamentary Trust shall expire upon ____________ attaining

the age of ________ years, at which time the net assets remaining in the

beneficiary’s Trust share shall pass and be distributed to that beneficiary outright.

Interim distributions prior to final distribution at age ________ shall be made at

the following intervals:

1) ____________ of the beneficiary’s Trust share at age ____________, and

2) _____________ of the balance of the beneficiary’s Trust share at age.

If ____________ has already reached any of the designated ages when

that beneficiary’s Trust is funded, the distributions outlined above for the ages

have already reached shall be made to the beneficiary at the time of funding

hereof.

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B. Trusts for Disabled Beneficiaries (Special Needs Trusts) It is possible to draft a trust for a disabled beneficiary which allows the beneficiary to

retain access to means tested benefits. In order to do so, the trust must meet several specific

requirements; a thorough discussion of these requirements could be (and regularly is) the subject

of a multi-day continuing legal education course, they are briefly addressed herein.

In general, the beneficiary must be disabled, the purpose of the trust must be for extra and

supplemental purposes, rather than for the basic support of the beneficiary (e.g. “health, care,

support and education” as discussed above). In addition, the trustee must not make cash

distributions directly to the beneficiary and the trustee’s distributions must be discretionary. The

reason behind each of these constraints is that beneficiary is not intended to receive benefits from

the trust that should/could be provided by a public benefits program. The most common of these

programs is Supplemental Security Income (SSI); it also serves as a gatekeeper to certain other

programs (e.g. Medicaid), so trusts are often drafted for specific compliance with the SSI

guidelines.

The trust should require that all payments for goods or services for the benefit of the

disabled beneficiary, including the payment of taxes and other known expenses, will be made by

the Trustee directly to the provider. Putting the funds into the hands of the beneficiary for the

purpose of paying for a supplement need defeats the purpose – the mere receipt of the funds

would render the beneficiary ineligible for the benefit. The essential terms of the purpose

statement for a special needs trust follow:

Sample Special Needs Trust Purpose.

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The express purpose of this Testamentary Trust is to provide for ____________’s

extra and supplemental care, maintenance, support and education in addition to

and over and above the benefits ____________ otherwise receives as a result of

____________ handicap or disability from any local, state or federal government,

or from any other private agencies, any of which provide services or benefits to

disabled persons. It is the express purpose of the Trustor to use the Trust estate

only to supplement other benefits received by the beneficiary. To this end, the

Trustee may provide such resources and experiences as will contribute to and

make the beneficiary's life as pleasant, comfortable and happy as feasible. This

Trust is to be considered as a discretionary, and not a basic support, trust. This

Trust estate shall not be used to provide basic food or shelter, nor be available to

the beneficiary for conversion for such items, unless all local, state and federal

benefits for which the beneficiary is eligible as a result of disability, have first

been fully expended for such purposes or unless the Trustee determines that

preservation of full benefit eligibility is not in ____________’s best interest.

When including a special needs trust in a will, the client and drafter should recognize that

the trust will not be effective if the beneficiary receives other assets from the will that would

disqualify him or her from eligibility for means tested benefits. Not only should the will not

include the beneficiary in other distributions, they should expressly exclude any individual who

would have rights to a distribution as an omitted spouse or child under Washington law (see

below).

C. Selection of Trustees / Custodians There are a wide variety of considerations with selecting the Custodian of a UTMA

Account or a Trustee that need to be considered. First and foremost is balancing the

responsibilities of the Trustee/Custodian with those of the Guardian. Depending upon the

individuals involved, the amount of money to managed, and the complexity of the estate and

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guardianship scenarios, it may be sensible to have the same person serve as Guardian and

Custodian/Trustee for efficiency and ease of management. However, the two roles require very

different skill sets so the same individual may not be the right choice for both. The

Custodian/Trustee may need to provide reports and accountings of assets, and will be responsible

for investing and managing the assets prudently. Their role may require significantly more

coordination with tax and/or legal professionals than the guardian’s role, but less day to day

activity. Even where a single individual is capable of filling both roles, separating the roles

allows each individual to exercise some oversight over the other.

Selection of a Trustee requires similar, but not identical, considerations to the selection of

a Guardian. The single most important value of the trustee is integrity – to be certain the assets

will in fact be managed responsibly. It may be useful to ask clients to consider the following

qualities and their relative importance to the client, after explaining the role of the Trustee:

(1) Ability to invest on his or her own;

(2) Ability to seek out good investment advisors;

(3) Shares client’s values;

(4) Will provide sound guidance to the beneficiary, if applicable;

(5) Knows the beneficiary and understands his/her needs; and

(6) The current relationship between the client and the proposed Trustee.

In addition, the Trustee’s responsibilities may be further separated, and often are. Trust

Protectors, Trust Advisory Committees, and the selection of an Investment or Financial Trustee

are common ways to divide responsibilities. Briefly, a Trust Protector is a named individual who

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exercises some oversight over a Trustee and has some authority over them. Most typically, they

have access to information about the Trust and the authority to remove a Trustee for any purpose

– a successor would then be named in whatever manner is provided for in the Trust document.

The idea of a Trust Protector is to avoid significant mismanagement. A more common scenario

for trusts in the family/minor/special needs context is a Trust Advisory Committee. This is a

committee made up of individuals with an interest in the beneficiary’s wellbeing. It may involve

the trustee, family members, friends, professionals familiar with a disabled beneficiary’s

condition or others. The committee is typically given authority to take broad actions, such as

meeting annually and developing a general budget to which the Trustee is to adhere. The

committee may or may not be directly empowered to remove a Trustee as well. A final, and

common, structure is for one Trustee to be primarily responsible for being aware of the needs of

the beneficiary to managing distributions for the person’s benefit. A separate trustee, often an

institutional trustee such as a bank or trust company, is responsible for the management of the

assets contained in the trust.

IV. Personal Representative and Non-Intervention Powers

The Personal Representative is the person who oversees the administration of the estate.

In Washington, this process can be made simpler and less expensive by granting the person

“nonintervention powers” in a will. A personal representative granted nonintervention powers

can essentially handle all claims against the estate and the distribution of assets pursuant to the

will without further court proceedings until the close of the estate. RCW 11.68.090 describes in

some detail the extent of the nonintervention powers. Similarly, a client may choose to waive a

bond requirement in order to provide for a more efficient probate. Pursuant to RCW 11.28.185,

a personal representative will be required to obtain a bond unless that requirement is waived or a

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specific exception applies. Providing, in the will, for the waiver of the bond requirement is one

of the exceptions listed.

A note about nonintervention powers: for most individuals and couples in Washington,

and particularly for the clients this program focuses on, a will is the correct centerpiece for

managing the transfer of wealth. Sometime clients (especially from another state) will seek to

avoid probate and therefore want to discuss a living trust. It is important to understand why they

are seeking to avoid probate – most often this is because they are familiar with probate in certain

other states that require many trips to court and attorney fees may be a substantial portion of the

estate. Probates are relatively inexpensive in Washington and can proceed quite quickly

compared to these states. Because a will is generally simpler to set up, requires less (or no)

effort to maintain and is relatively less expensive, it is generally a better option than a living trust

for family clients.

V. Reciprocal Wills The most common will prepared or families is a reciprocal will between spouses, where

all assets are left to the surviving spouse and each spouse has identical provisions upon the death

of the second spouse. It is important to assess at the outset whether the couple wants to create a

binding obligation that neither will be amended without the consent of both parties. Under

Washington law, the couple may create a binding obligation upon one another only by contract.

A simple contract entered into by both parties, observing the requirements of a community

property agreement, may create a binding obligation not to revoke or amend a will. Because a

reciprocal will brings a heightened probability that such a contract exists, it may be useful to

include the contract’s existence (or lack of existence) in the will itself, e.g.:

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Sample Language Regarding Power to Revoke.

The terms of this Will and the Will executed on the date hereof by ____________

are essentially reciprocal. The wills <are or are not> executed pursuant to

<an/any> agreement between us <of even date herewith> and <may/may not> be

changed or revoked according to the testator’s wishes.

In families where there are children from prior marriages, or there are other concerns about

distribution of assets, it may be wiser to secure the children’s interest in assets while permitting

the spouse substantial control through the use of one or more trusts, discussed briefly below.

VI. General Provisions There are several provisions drafters should always include when preparing a will; they

are discussed briefly below.

A. Revoking Prior Wills Some testators will not recall the existence of a prior will, or will recall the wrong will as

their last. Drafters are wise to clarify that the current will is intended to revoke all prior wills.

Sample Language Revoking Prior Wills.

I, ____________, now residing at ____________ do hereby make, publish and

declare the following to be my Last Will and Testament, hereby revoking any and

all Wills, Codicils and Testamentary Dispositions heretofore made by me,

including, but not limited to that last Will and Testament executed____________.

B. Naming Intestate Heirs Certain omitted intestate heirs retain inheritance rights under Washington law if they are

not expressly excluded from the will. RCW 11.12.091 and 095 describe the effect of omitting a

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child and spouse, respectively, from a will. These most often occur in the case of a family

dispute, a disabled beneficiary (discussed above), or marriage or childbirth which occurs after

the will has been executed. Accounting for a future spouse or future children may be an

important aspect of a well drafted will depending upon the client’s situation.

In both cases, the child or spouse must “receive an amount equal in value to that which

the [spouse, domestic partner, or child] would have received under RCW 11.04.015 if the

decedent had died intestate, unless the court determines on the basis of clear and convincing

evidence that a smaller share, including no share at all, is more in keeping with the decedent's

intent.” RCW 11.12.091(3), RCW 11.12.095(3).

Pursuant to both statutes, if the will names or provides for the individual specifically, by

reference to a future child or spouse, or, in the case of child, by reference to certain classes of

individuals to which the child belongs,4 the spouse or child will not be treated as omitted.

Appropriate language to ensure that (a) there are no omissions or (b) omissions are clearly

intentional is very situation dependent. However it should be noted that simply provided a

nominal interest to an individual is unwise – such an approach does not qualify as “naming or

providing for” the individual under the will, thus there must be clear and convincing evidence

that the omission is intentional for it to be effective. See RCW 11.12.091(2)(c), RCW

11.12.095(2)(c).

4 “A reference in a will to a class described as the children, descendants, or issue of the decedent who are born after the execution of the will, or words of similar import, constitutes a naming of a person who falls within the class. A reference to another class, such as a decedent's heirs or family, does not constitute such a naming.” RCW 11.12.091.

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C. Predeceasing Heirs To facilitate orderly administration, it is generally advisable to treat individuals who in

fact die after the testator should be treated as predeceasing him/her. A very brief period of time

is covered by law – the uniform simultaneous death act provides that an heir or beneficiary will

be treated as predeceasing the testator if they did not survive the testator by 120 hours (unless

this would result in the testator dying intestate). RCW 11.05A.020. A period of time long

enough for the estate administration to have effective begun is often appropriate, and between 90

and 150 days is common.

Sample Language on Predeceasing Heirs and Beneficiaries.

For purposes of this Will, any person entitled to take hereunder who does not

survive me by ____________ days shall be deemed to have predeceased me, and

shall take nothing hereby.

D. Disposition of Personal Property The ability to control the disposition of particular items of personal property, such as

family heirlooms, in a legally binding manner is often another important reason that families

decide to draft a will. This information is typically included in a section on specific bequests –

and items that the testator has relative certainty on may be appropriate to include in the will

itself. However, RCW 11.12.260, permits the testator to direct the disposition of tangible

personal property through a separate writing, so long as the writing is referred to in an unrevoked

will, is written in the handwriting of, or signed by, the testator, and describes the property and

recipients with reasonable certainty. RCW 11.12.260(1).

Sample Language on Disposition of Tangible Personal Property.

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I specifically give, devise, bequeath and convey all other tangible personal

property, including photographs, remaining personal jewelry, wearing apparel,

furniture, furnishings, artwork, vehicles, and all other of my personal effects to

my spouse. In the event that my spouse predeceases me, I direct that all my

personal effects, not specifically mentioned herein, are to go to my personal

representative for distribution according to my desires, which shall be made

known to my personal representative by a separate letter of instructions executed

by me prior to my death pursuant to RCW 11.12.260. The aforesaid letter of

instructions may be added to or amended by me at any time after the execution of

this Will. If I do not provide my personal representative with a letter of

instruction, then my personal representative shall distribute my personal property

in an equitable manner as he or she sees fit.

E. What Else Needs to Be Include - A Quick Checklist Payment of Debts and Expenses – Direct the Personal Representative to pay for

burial, funeral and other expenses as due

Payment of Taxes – Ensure that taxes and related liabilities are paid prior to

residual distributions

Specific Bequests – Distributions that take precedence over others. Consider

whether it is appropriate for any special needs trust to be funded with a specific

bequest or a share of the residual estate.

Distribution of Remainder

o Per stirpes vs. Per capita

o Treatment of Predeceasing Beneficiaries (children)

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Attestation & Witnesses

Self-Proving Affidavit

VII. Other Common Issues

A. Pet Trust Under RCW 11.118 a trust for the benefit of a “nonhuman animal with vertebrae” is valid

in Washington State. These trusts are not generally acceptable under the common law of trusts,

and have some specific applicable statutory provisions (e.g. no reports to beneficiaries are

required; protection of distributions for benefit of animal).

B. Non-Citizen Spouse When a US Citizen dies leaving assets to a non-citizen spouse the transfer may be subject

to substantial taxes. Particularly in a border states and large metropolitan areas, this scenario

occurs with some frequency. It is important to recognize this situation and, if faced with it,

recognize the planning opportunity that exists. A Qualified Domestic Trust (or QDOT) is a

common means of transferring assets without subjecting them to these taxes. It includes a

number of specific requirements – principal among them is that the funds be controlled by a

trustee who is a “US Person.”

C. Other Common Trusts Re: Spouses As mentioned above, there may be a desire to retain some control over the disposition of

assets after the testator’s death. In the family context, this most often means permitting

designated assets to benefit to the spouse to a certain extent, while preserving the remaining

assets for children. There are two principal means of doing so – the Qualified Terminable

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Interest in Property Trust (QTIP) and the Bypass Trust. A QTIP is properly thought of as a trust

that primarily benefits the spouse, but the testator controls what happens to trust controlled assets

at the death of the spouse. A Bypass Trust is focused primarily on benefiting children at the

spouse’s death, but may permit limited distributions to the spouse during his/her lifetime.

Substantial additional considerations outside the scope of these materials must be considered

prior to incorporating either trust into an estate plan.

A. Multiple Trusts in One Will There are certain provisions which will be common to virtually all trusts. When more

than one trust is included in a document, it may be more efficient, and easier for the family to

client to read, to include common provisions in a single section of the will. This would include

provisions regarding the following: Exhaustion of Trust Assets, Amendment of Trust

Agreement, Situs, Spendthrift Clauses (see above), Accounting Requirements, General Trustee

Powers, Consolidating Trusts, and Successor Trustees

VIII. Summary Although drafting family wills for the 99% does not include all of the tax planning

strategies that would be required for the very wealthy, it requires sensitivity to each families’

specific needs, knowledge of the tools available to implement those needs, and the ability to

educate and advise the family on the various choices they will be facing. This presentation has

endeavored to cover in some detail the most common situations families will address, and to

touch many others that often arise as well. However there is no end to variety of circumstances

and needs for each individual client.

chapter 7 2:15 – 3:15pm drafting wills for families

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