July 2006 - Updates in Washington Estate Planning Law

Washington Estate and Transfer Tax Act
On May 17, 2005, the legislature enacted and Governor Gregoire signed into law the Washington Estate and Transfer Tax Act. Estates of decedents who die on or after the effective date of May 17, 2005 are subject to the tax. It is a stand-alone tax, meaning that it is not coupled with changes to the federal estate tax law. In general, the tax applies to decedents dying on or after January 1^st of this year whose estates exceed $2 million, with certain exclusions including a farm deduction. All estates are required to file a Washington tax return if a federal return is required, even if no tax is due. The complete estate tax rate table may be found on the Department of Revenue website. Petitions for Initiative 920 are currently being circulated in order to eliminate this tax, so stay tuned for further news.

Electronic Statewide Health Care Declarations Registry
Another new law creates an electronic “statewide health care declarations registry” for storage of

• Health Care Directives,

• Durable Powers of Attorney for Health Care Decisions and

• Mental Health Advance Directives

The Department of Health will establish and maintain this registry. It is optional for you to store your documents in this registry. The basic purpose of the registry is to allow health care providers the ability to check to see if anyone has prepared these documents, if these documents are not already in their patient files. I recommend that, if you have not already done so, you provide copies of your Health Care Directives and Durable Powers of Attorney for Health Care Decisions to any physicians currently working with you.

Durable Power of Attorney and Minor Children:
Washington’s durable power of attorney statute was amended to permit designations with respect to the care of minor children. Parents may nominate a guardian for their children within their General Durable Power of Attorney, to be effective in the event of their death or incapacity. You may also authorize someone to make health care decisions for your children in the event of your incapacity.  In essence, if you are incapacitated, this change allows you to appoint a temporary caregiver for your children. (I was very pleased with this particular change, and believe it will be extremely beneficial to a number of my clients).

Uniform Transfers to Minors Act Extension:
Finally, many of you have made distributions in your Wills to minors pursuant to the Uniform Transfers to Minors Act.  Previously, this transfer created a custodianship until the minor reached twenty one years of age. Beginning on July 1, 2007, you may extend the custodianship until age twenty five.

Any questions? Please contact Stacey's office at inquiry@staceyromberg.com