What We Do
McKarcher Law specializes in estate planning and estate administration for Idaho and Washington clients. We prepare will-based or trust-based plans that include powers of attorney for property and health care, health directives, and other related documents. We advise trustees and personal representatives in administering estates, whether through a court-based probate or private trust administration.
Our clients prefer a comprehensive and meticulous approach to their estate planning that focuses on:
- Identifying and minimizing the risk of disputes
- Planning for income and capital gains taxes
- Planning for estate taxes, if applicable
- Providing asset protection for beneficiaries
- Professional administration, if desired and appropriate in the situation
Some believe their situation is “simple,” or that they just need a “simple” will. But consider, for example:
- Some may not have any assets subject to federal or state estate (or “death”) tax. In our experience, however, many Washington residents do not realize that a combined marital estate of $3 million or more that is administered with “simple” planning will likely expose the surviving spouse to Washington estate tax and all the tax filings and administrative cost that come with it. This is because each spouse’s Washington “exemption” must be used at his or her death or it is lost forever.
- Nearly everyone has significant income and capital gains tax exposure of which they are unaware, including issues arising from tax-favored IRAs or other retirement accounts.
- Those who gift assets to children before death often create unfortunate tax outcomes for the recipients. In many cases, it is far better (and just as straightforward) to give the relevant asset at death.
Intestacy/Administration vs. Testacy/Probate vs. Trust Administration
There are key distinctions among intestacy, probate, and trust administration. Each is useful and appropriate in certain circumstances, but the three processes vary in ways that can make big differences that can surprise the affected fiduciaries and beneficiaries.
➤ Intestacy occurs when someone dies without a valid will. Assets are distributed according to state law to one’s “heirs at law.” Multiple heirs often have equal right to “administer” the decedent’s estate, causing potential disputes over control or authority of the assets from the very beginning.
➤ Probate is a court-supervised process that validates a deceased person’s (or “testator’s”) will and approves the person nominated in the will to administer a decedent’s estate. “Administration” is the technical term for the same process when the decedent left no valid will, i.e., died ”intestate.” The processes have different names formally, but each involves the court’s appointment of a “personal representative” to collect and distribute the decedent’s assets. The process, because it is court-based, is public and requires more formalities and “steps” than a trust administration. Probate and administration may incur court filing fees, but do not otherwise involve the “escheat” or loss of assets to the state or strangers, as some sources seem to imply. Each requires that affected parties be given notice and an opportunity to be heard in court, as required by our federal and state constitutions. This becomes most relevant when an affected party is disinherited or given less than they might receive in intestacy, e.g., if they challenge the will or present their own found will.
➤ Trust administration involves a trustee managing and distributing the “grantor’s” assets held under a trust agreement (yes, a contract!) for the benefit of the grantor’s beneficiaries. This occurs outside of court supervision unless the trustee requires court clarification, or litigation arises regarding some asset. This process is generally more private, speedy, and efficient, and avoids mandatory court-based notice to all the grantor’s heirs at law (as with probate and administration). This does not magically eliminate all the steps needed properly to administer the grantor’s estate, particularly regarding filing final tax returns, but it nearly always provides more flexibility to implement the grantor’s wishes.