Tax Filing Mistakes That Can Affect Your Estate Plan in Washington State

Crafting an estate plan is vital to ensure your assets are handled according to your wishes, your family is secure, and taxes are kept to a minimum. However, errors can bring about future troubles, learn Tax Filing Mistakes That Can Affect Your Estate Plan and how we can be of service in protecting your assets and legacy. If you're a Washington resident, be sure to avoid these typical oversights:

Key Estate Planning Errors

Ignoring the Washington State Estate Tax Advantage

Washington levies its own estate tax, offering an exclusion of $2.193 million (in 2024). A frequent mistake is leaving everything to your spouse, thereby bypassing this exclusion. Strategically, you could protect close to $2.193 million from estate taxes, leading to substantial savings for your beneficiaries. Incorporating clauses that activate this exclusion can be quite beneficial for surviving family members.

Failure to Update Beneficiaries 

Always keep your beneficiary designations current and consistent with your comprehensive estate plan. Designations for retirement plans, life insurance policies, and accounts payable upon death take precedence over your will. Update these designations after significant life changes like marriages, divorces, or births to prevent unintentional outcomes and align with your current intentions.

Failure to Utilize Trusts

Trusts can be powerful, but their advantages are frequently misunderstood. Utilize trusts to safeguard loved ones, particularly children from blended families or those with specific needs. Directly bequeathing assets to a special needs individual can jeopardize their eligibility for government aid. A Special Needs Trust or Supplemental Needs Trust enables you to provide for them without affecting their access to these crucial benefits.

Disregarding the Complexities of Blended Families

Blended families bring distinct challenges to estate planning. Avoid assuming a subsequent spouse will always prioritize children from a previous union. Clearly delineate asset distribution to ensure children from earlier relationships are well-provided for. A living trust or testamentary trust (within a will) can offer critical safeguards. On the other hand, some plans fail to adequately accommodate a later spouse. Strive for an equitable balance between the needs of the current spouse and children from prior relationships to prevent future disputes.

Withholding Communication

Be sure to have open communication. Clearly conveying your estate plan details to family members prevents confusion and disagreements. Lack of awareness can lead to unexpected surprises, misunderstanding, and conflicts. Discuss your intentions with beneficiaries and executors, clarifying their responsibilities to mitigate potential disputes and delays. Make it a habit to periodically discuss and revise the plan with everyone involved.

Misunderstanding Retirement Assets and Distribution Protocols 

Various beneficiaries—like spouses, dependent children, or individuals with disabilities—face differing regulations regarding the timing and manner of distributions. Inadequate planning can result in unexpected tax burdens. Grasp these regulations and structure your beneficiary selections accordingly.

Downplaying Asset Titling Significance 

The way you title your assets profoundly influences your estate plan. Joint ownership with survivorship rights allows the asset to automatically transfer to the surviving owner, circumventing your will. However, there can be downsides to joint ownership. Accurate asset titling ensures your estate plan operates as you intend.

Ignoring Routine Estate Plan Updates 

As life evolves, so should your estate plan. Regular consultations with an estate planning professional ensure your plan remains aligned with your current wishes and circumstances.

We can help you avoid tax filing mistakes that can affect your estate plan

At View Ridge Family Law & Estate Planning, we recognize the intricacies of estate planning. Our legal team can assist you in formulating a holistic strategy that mirrors your desires and secures your family's future. We also maintain a network of trusted professionals for services outside our areas of practice.

From guidance on beneficiary arrangements to creating trusts and handling the specific needs of blended families, we deliver custom-tailored guidance that puts your objectives first.

For help with your estate plan, please contact us at 206-703-0764 or visit us online to arrange a meeting. We are ready to guide you toward a protected and confident tomorrow.