Estate Planning Basics
The Process
Estate planning can seem like a daunting process. We are here to make it as easy for you as we possibly can. You will meet with one of our caring attorneys, who will listen to what your goals are and tell you how we can best help you meet those goals. Different situations direct whether a will or living trust is an appropriate planning tool. A complete estate plan also typically includes planning documents in case you become incompetent or are unable to communicate. A health care directive allows another person to communicate your medical wishes to your doctor and a power of attorney gives another person the legal authority to handle both legal and financial matters.
At our firm, a two meeting process is used. At the first meeting, you will meet with one our attorneys. We will educate you about the law relating to Minnesota wills, trusts, and the probate process. We will listen to your planning goals and concerns and gather detailed information about your family and your assets. By the end of the first meeting, the attorney will recommend a specific estate plan and quote you a flat fee for the legal services. During the second meeting, you will review your documents in depth with your attorney to ensure accuracy and that your goals are being met. We will then help you properly sign your documents and help with updating your beneficiary designations. In the years following, we will be here to help review your planning to determine whether it needs adjustments due to changes in your circumstances, your goals or laws.
What is Probate and why would you want to avoid it?
If a person has over $50,000.00 of assets in his or her name alone at the time of death the estate will need to go through probate. Probate is the legal process in which a court oversees the distribution of property left by the decedent. There can be disadvantages to having your estate go through probate. These include
- Cost of Administration. Probate can be expensive to your family.
- Delays in handling assets and obtaining distribution of assets. Probate takes a minimum of four months, but typically last much longer.
- Lack of Privacy. Probate is a matter of public record. Your will would be filed with the court and viewable to the public.
What is a Will?
A will is a formal expression of a person’s intent set forth in a manner required by law. In your will, you name a personal representative to administer your estate when you die, indicate how you want your assets to pass, including any specific gifts you wish to make, and can also name a guardian if you have minor children. For many clients, a will with a contingent trust is a desired planning option. A contingent trust allows you to name a trustee to manage the funds for a minor child. You can designate an age (or ages) that you would like assets distributed directly to your child, such as ½ at age 25 and the balance at age 30. While the assets are held in trust, your child may request distributions from the trustee you have named for needs such as health or education.
What is a Living Trust?
If you are a single person, a living trust may be a good option for you. A living trust is a written agreement between the creator of the trust (the “donor”) and the person who is going to manage the trust (the “trustee”). You transfer your assets into the trust, with the understanding that the trustee is going to follow the rules set forth in the trust. Usually, during the donor’s lifetime, he or she is also the trustee. If you become incapacitated or are unable to manage your own financial affairs, a successor trustee, who is nominated in the trust document, will step in and manage your assets on your behalf, thereby avoiding a conservatorship or guardianship procedure. The advantages of a living trust include avoiding probate, maintaining privacy because the trust does not need to be filed or recorded, and knowing that you maintain flexibility to change or revoke the trust. Along with the trust document, we would also prepare a pour-over will, certificate of trust, and bill of sale.
What is a Power of Attorney?
A power of attorney is only valid during your lifetime, and covers legal and financial decisions. This document allows you to name one or more agents to make decisions on your behalf. This document is especially useful if you become incapacitated or incompetent.
What is a Health Care Directive?
The health care directive is effective when you are unable to communicate a decision about your own healthcare. In it, you may designate a health care agent to make decisions on your behalf. You may also direct the type of care that you want and do not want, where you would like to have care administered, and who you would like to administer care. You may express your wishes about organ donation or burial or cremation. You may also designate a health care agent to make decisions on your behalf. Typically clients name a spouse as their health care agent.
