New Year, New You, New…Estate Plan?
January 1st comes around and the whole world is ready to start fresh with new resolutions for how to make the next year their best year yet. However, did you know 80% of those resolutions fail by the second week of February? One resolution that you absolutely must keep is creating or updating your estate plan.
Failure to properly plan for your estate and the unexpected can have adverse consequences for you and your family – and having that uncertainty is not the way to start a new year.
Below is a list of some of the core estate planning documents we recommend be put in place.
Planning for Incapacity
- Durable Power of Attorney for Financial Affairs. This is a legal document where you appoint another individual to handle your financial affairs should you become incapacitated. Without this document, your family may be forced to obtain court authority through a conservatorship proceeding.
- Advanced Medical Directive. In Minnesota, this document is referred to as a Health Care Directive with two primary functions: first, to outline your medical preferences should you be unable to communicate; next, this document appoints the agent to make medical decisions on your behalf should you be unable to express your wishes. Failure to implement a health care directive may result in your family having to obtain court authority through a guardianship proceeding.
Planning for Death
- Last Will and Testament. A will designates the administrator of your estate, outlines the distribution of your probate assets, and, if applicable, nominates a guardian for minor children. Probate is the process of transferring a deceased person’s “probate property” using the court system. Probate property includes, but is not limited to, assets held in the decedent’s individual name and assets held with other as “tenants in common.” There are also other ways which certain property can be subject to the probate process. A will only controls your “probate assets.”
- Revocable Living Trust. A revocable living trust serves as an alternative to a traditional will and the probate court administration. By transferring your property to your trust during your lifetime, or directing assets to the trust after your death, the property passes free of probate. Avoiding probate court may provide a less costly and more efficient settlement of the estate – especially for those owning property in several states.
If you are interested in creating or updating your estate plan, FMJ’s Trust & Estates group is happy to discuss. Clients can email us at firstname.lastname@example.org to have someone from our Trusts & Estates group contact them. We offer complimentary 30-minute initial consultations and flat-fee estate planning to fit every budget.