Health care directives, or living wills, made major headlines during the Terri Schiavo case and many people talked about the need for such documents. But as the topic has faded from the headlines, it has also faded from our minds. A health care directive allows you to express your wishes and make decisions on medical issues if you are unable to communicate with your doctors. You can also appoint an agent to make these decisions for you. Even though the subject matter may be difficult, getting a health care directive is really simple. What excuse do you have for putting it off?
Estate Planning
Don’t Cause A Headache – Organize your Estate!
Imagine for a moment that you have just died suddenly. Your grieving loved ones are in complete shock. When it comes time to “get down to business” they are still having a difficult time accepting the fact you are gone. They come to your house looking for a will. They think you might have one, but don’t know for sure. Will they be able to find one? Through their tears, they rifle through your important looking papers. They are trying to figure out what assets you owned, what debts you have, and where everything is located. How long will it tack them to track everything down? As they inventory your personal property, they wonder what they are supposed to do with it. Who would you want to receive your treasured book collection?
Unfortunately, this scene is all to common for many families. Do your loved ones a favor – let them know whether or not you have a will (you really should) and where it is. Let them know where your important documents are kept. Do whatever you can to keep your papers organized. Consider preparing an Estate Organizer. Each of my estate planing clients receives one – a workbook where they can provide information on the important people and professionals who should be contacted, the identification and location of assets, debts, and important paperwork, instructions for personal property, and a list of all of those memberships and internet accounts you might want cancelled upon your death.
Taking the time now to organize can save your family a lot of time and tears later.
What are you leaving behind? Ethical wills and passing along more than money.
When we talk about estate planning we are generally talking about the business of transferring property and money upon death. However, our most valuable assets often have nothing to do with trust funds or dollar signs. Things such as family history; life lessons; personal values; old photographs, journals, or poems – these are the things that mean the most to us, and to our families. Unless you plan ahead, there is a very good chance these things will be lost upon your death.
One way to preserve these things is by preparing an “ethical will” or “legacy letter.” This is not a legal document or will in the normal sense of the word. But it is a way for you to organize your thoughts and feelings and share them with your loved ones after you are gone. For a great resource on ethical wills check out: http://ethicalwill.com/
Unintended Inheritances: Another Reason to Avoid DIY Estate Plans
While retiling the bathroom floor or installing new switch-plates throughout your house may be great DIY weekend projects, writing your own will should not make your to-do list. In the instance that the tile job is botched, you can hire a professional. If you botch your own will, there is nothing you can do or say about it after you are gone. In case there is doubt on the subject, take into account the story of Mr. and Mrs. Sowell and their son, Martin.
The Sowells had a $500,000 dollar estate of which they chose to leave their son $50. This was not just because Martin had not been a wonderful son. Martin had attempted to poison his parents and had furthermore shot his mother multiple times. Although his assassination attempts were unsuccessful, Mr. and Mrs. Sowell did pass away in 2007 and 2008 respectively. Upon their deaths, they concurrently willed to their son $50. However, their homemade wills left the bulk of the estate to the surviving spouse, with no mention of who would be the beneficiary should the spouse not survive. After Mrs. Sowell died, Mr. Sowell failed to update his will, so after he had also passed away, the entire estate passed to the next of kin: their dear son, Martin. So, even after Mr. and Mrs. Sowell tried to in-effect disinherit their murderous son, because of their DIY wills, he stood to inherit everything.
Although most people will not have to worry disinheriting a child because of attempted murder, the message is still the same: Do NOT write your will yourself. There is a high likelihood that your final wishes could be misinterpreted or disregarded due to even the simplest of mistakes.
The only way to ensure that your estate is protected and distributed in the fashion that you determine is to have your wills professionally drawn up by an attorney. Furthermore, wills should be updated periodically, especially if a named beneficiary passes away. If the Sowells had taken either of these steps instead of going the DIY route, their estate would not have landed in the wrong hands.
Source: Bradley B. Wrightsel
Trusts in Your Estate Plan
While many people consider a “simple will” an important part of taking care of their family after their death, they forget to consider including a versatile option: Trusts.
Trusts come into being through a person’s will or a separate legal document establishing that trust. A person who creates a trust is called a “grantor” or “donor.” When a trust is created, the grantor chooses a trustee to manage the assets, or the “principal,” and then an income is paid out of that trust to those the grantor chooses to support, known as the “beneficiaries.” Almost anyone can be the beneficiary to a trust.
A trust can be either revocable or irrevocable. A revocable trust agreement allows the grantor to amend or cancel the trust at any time, in case he or she has a change of heart. On the other hand, if the trust arrangement is put in a will, it will become irrevocable upon the grantor’s death.
There are several different types of trusts. Each type of trust has a specific purpose and will help you accomplish your estate planning goals. Two common testamentary trusts (trusts created in a will) are family trusts and QTIP trusts.
With a family trust the grantor creates a trust in his or her will, known as a testamentary trust, for the benefit of that person’s spouse, children, or other family members. Often, a husband and wife set up a trust in their wills for the surviving spouse’s benefit. Each states that after his or her death, the trust shall continue for the support of their children until the children attain a certain age. Then, the trustee turns over the principal to the children.
A Qualified Terminable Interest Property (QTIP) Trust is similar to the family trust, but places more restrictions on the surviving spouse. In this trust, although the surviving spouse receives lifetime income from the trust, he or she may not have the power to determine the beneficiary of the remaining trust assets upon the survivor’s death. This is to allow for more control in a second marriage situation where the goals are to provide maximum financial support for the surviving spouse while still passing the trust principal to the children of the prior marriage.
A trust can be the ideal solution to satisfy a person and his or her family’s financial needs during and after their lifetime. A trust is a powerful tool that assures a person that his or her wishes will be fulfilled. To determine whether a trust would be the appropriate tool to fulfill your estate planning goals, consult with an estate planning lawyer to discuss the specifics of your situation.
Minnesota Estate Planning Attorney Answers: Who Needs a Will?
While not everyone needs a will, most people could benefit from a will. You could use a will if:
- You would not want your property divided according to your state’s intestacy laws
- You would want to leave something to a person not recognized by your state’s intestacy laws (a non-marital partner, a stepchild, a best friend)
- You or your spouse have children from another relationship
- You have minor children and would like to designate a guardian to care for them
- You have a beneficiary with special needs
- You have specific wishes regarding how your assets are distributed
- You would like to leave something to a charity.
- You would like to establish some sort of trust upon your death
- You have a substantial estate and could benefit from tax planning
If you need a will, Monticello based Minnesota Estate Planning Attorney Jennifer R. Lewis Kannegieter provides a variety of estate planning services for clients throughout the Twin Cities and Central Minnesota. Contact Jennifer today.
