Why Estate Planning Matters: 5 Common Misconceptions

For many families, especially within Asian communities, talking about inheritance or death can feel uncomfortable, even taboo. As a result, estate planning is often delayed until it is too late. But in the United States, failing to plan can create serious legal and financial challenges for the people you care about most.

Estate planning is not only for the wealthy or the elderly. It is a responsible and loving act that gives your family clarity and protection when they need it most. The following five common misconceptions show why early planning is essential.

Myth 1: Estate planning is only for the wealthy.

Many families assume estate planning is something only the ultra-rich need, those with mansions, multiple properties, or millions in investments.

In reality, estate planning is about clarity and protection, not just taxes or wealth. It ensures that your wishes are respected, your loved ones are cared for, and your affairs can be managed efficiently if something happens to you.

While Washington’s estate tax applies only to estates above 3 million dollars effective July 1, 2025, meaning most families will not owe any, certain households can still approach that threshold more easily than they expect. For example, retirement accounts such as 401(k)s and IRAs, life insurance proceeds, RSUs or company stock, and real estate in high-value cities like Shanghai, Hong Kong, Beijing or Taipei can quickly add up when calculating the taxable estate.

For many immigrant families, estate planning is less about avoiding taxes and more about coordination. It helps ensure assets in different places are properly titled, beneficiaries are designated, and loved ones are not left navigating multiple legal systems. Even simple planning can save time, reduce confusion, and bring peace of mind.

Myth 2: A will is all you need.

A will is a foundational document. It ensures your wishes are followed and designates who will handle your estate after you pass away. But a will alone does not address every scenario, and it only takes effect after death.

In Washington, most wills go through probate, a court-supervised process that validates the document and authorizes the executor to act. Probate in Washington is usually routine, relatively inexpensive, and much simpler than in many other states, especially for uncontested estates.

Because of that, a revocable living trust is not always necessary. However, there are certain situations where creating a trust can make sense. For example:

• When your estate is above the state or federal estate tax threshold.
• When you have minor children and want to control how and when they receive assets.
• When you want to maintain long-term control over your assets even after death.
• When you own property outside of Washington, especially real estate in another state or country.
• When you have heirs with special needs or beneficiaries who may not manage money responsibly.
• When you value privacy and prefer to keep your estate matters out of the public record.

In these circumstances, a trust can be a practical tool for privacy, flexibility, and continuity. Still, for most families, Washington’s probate system is straightforward enough that a trust is not always required.

A well-balanced estate plan often includes a will, durable powers of attorney, and health care directives that take effect during your lifetime. Together, these documents ensure your wishes are respected and your loved ones are protected, both during life and after death.

Myth 3: My spouse will automatically inherit everything.

Many couples in Washington believe that because the state follows community property laws, everything will automatically pass to the surviving spouse. Unfortunately, that’s not always true.

Under Washington law, each spouse owns one-half of all community property, generally, assets acquired during marriage. But any separate property (such as assets owned before marriage, gifts, or inheritances) does not automatically go to the surviving spouse. If there’s no will or trust, the distribution of the decedent’s estate follows RCW 11.04.015:

• The surviving spouse automatically receives the deceased spouse’s one-half share of the community property, which means all community property becomes the sole property of the surviving spouse.
• For separate property, if there are surviving children, the spouse inherits one-half and the remaining one-half passes to the children.
• If there are no children but surviving parents or siblings, the spouse inherits three-fourths, and the remaining one-fourth goes to the parents or siblings.
• If there are no other surviving relatives, the spouse inherits the entire estate.

Things can get even more complicated when a family owns a home purchased before marriage, uses joint funds to pay the mortgage, or has property in another state or country. Determining what’s “community” versus “separate” often requires legal tracing and can easily lead to disputes among heirs.

A properly drafted will ensures that your spouse receives what you intend and avoids unnecessary court involvement. You can also use community property agreements, beneficiary designations, or trust planning to simplify the transfer process and prevent confusion.

In short, marriage alone doesn’t guarantee automatic inheritance, clear estate planning does.

Myth 4: It’s too early, I’m still young and healthy.

Estate planning isn’t just for the elderly or the wealthy; it’s for anyone who wants to stay in control. Life is unpredictable. Illness, accidents, or sudden incapacity can happen at any age. When that happens, your family may need to make urgent financial or medical decisions. But without the proper legal documents, they might not have the authority to act on your behalf.

In Washington State, if you become incapacitated without a Durable Power of Attorney or Health Care Directive, your loved ones may have to go through a court process to be appointed as your guardian or conservator. That process can take months and cost thousands of dollars. More importantly, the person appointed by the court might not be the one you would have chosen. A few simple documents can prevent that situation entirely:

• Financial Durable Powers of Attorney: Lets someone you trust handle financial and legal matters if you can’t. Many couples may assume that if one spouse becomes incapacitated, the other can automatically manage their finances. In Washington State, that’s not the case. Unless an account or property is jointly owned, a spouse does not have automatic authority to act for the other. Without a Durable Power of Attorney, your loved one may need to petition the court for a conservatorship to pay bills, manage investments, or sell property, a process that is time-consuming and expensive.
• Medical Durable Powers of Attorney: Allows you to appoint someone you trust to talk with doctors and make other medical decisions if you’re unable to communicate, such as authorizing surgery, selecting a hospital, or choosing end-of-life care.
• Health Care Directive (Living Will): Lets you state your wishes about life-sustaining treatment. For example, whether you would want to be kept on a ventilator or feeding tube if you’re permanently unconscious.
• Nomination of Guardian for Minor Children: For young parents, this document allows you to nominate who you would want to care for your children if something happens to you. While the court makes the final appointment, judges in Washington usually give strong consideration to the parents’ wishes.

Myth 5: My overseas assets don’t matter in the U.S.

Many Chinese and international families assume that assets held abroad, such as property or bank accounts in Mainland China, Hong Kong, or Canada, are separate from their U.S. estate. Unfortunately, that is not the case under U.S. law.

The United States taxes its citizens and domiciliary on their worldwide estate, not just on assets located within the country. This means that when someone passes away, their global property, including overseas real estate, investments, and even life insurance, may be counted toward both the federal and, for Washington domiciliary, the state estate tax thresholds.

Washington State’s estate tax applies to Washington domiciliary once their estate exceeds 3 million dollars for decedents dying between July 1 and December 31, 2025. A family that owns a Seattle home and a condo in Shanghai could reach those levels when life insurance proceeds and retirement assets are included.

Beyond taxes, there are practical challenges. U.S. probate courts generally have no authority over foreign property, which means your executor may have to work through two legal systems, one in the U.S. and another where your overseas assets are located, causing delays and additional expenses.

Proper planning can minimize these risks. Depending on your circumstances, that may include:

• Coordinating dual wills (one in the U.S. and one overseas) to ensure each complies with local law and avoids conflicts.
• Keeping clear records of ownership and cost basis for foreign assets to support accurate U.S. reporting and valuation.

Conclusion

Estate planning is not just a set of documents but a comprehensive family strategy. It helps ensure that financial, legal, and personal matters are well organized and managed according to your wishes. Whether you are a new immigrant, building your career, or preparing for retirement, estate planning is an essential step for families in the United States to protect both their loved ones and their assets.