What you need for an estate plan varies with each life stage or milestone. Here are some examples of estate plan considerations for Minnesotans at various ages and life stages/milestones:
Age 18: If you are a young adult you should have a Health Care Directive and Durable Power of Attorney because incapacity can strike at any time. The Health Care Directive will enable your hand-picked agent to make decisions regarding your body, and the Durable Power of Attorney will enable your hand-picked representative to handle your financial affairs.
Young and Single: If you’re starting to accumulate some possessions and money, you should consider a Will in addition to a Health Care Directive and Durable Power of Attorney. If you die without a Will, your assets will probably go to your parents. If you have a Will, you could decide who will receive your possessions.
Married, no Kids: Your spouse will likely inherit your assets even if you don’t have a Will, but you’ll need a Will if you want some of your possessions and/or assets to go to anyone else. At the death of the last spouse to die, whatever remains of the assets accumulated by both spouses will go only to the relatives of the last spouse to die unless a Will or Trust provides otherwise.
Birth of a Child: Now you need a Will, at a minimum, as it is through a Will that you name guardians for your children should both you and your spouse die. It is also a good time to consider life insurance so that there is money to support your children should the breadwinner(s) suddenly die. As before, you should have a Health Care Directive and Durable Power of Attorney. If you don’t name a guardian, Minnesota will select a guardian for your children, and you may not like that choice.
Starting a Business: A Revocable Trust may enable seamless management of your business if you become incapacitated or die because your successor trustee can manage the business interests that you’ve placed in your Trust. With just a Will, the personal representative (executor) that you’ve nominated in your Will has no authority to act until officially appointed by the Court, and that may take some time. The power you’ve granted under a Power of Appointment terminates at your death.
Middle-Age: If you haven’t already considered a Revocable Trust, do so now. A Trust can allow you to control the ages at which your children receive money from your assets after you die, can be beneficial to you if you become incapacitated and can be helpful if you own real estate in more than one state. A Revocable Trust also creates the possibility of avoiding probate proceedings at your death. With a Revocable Trust, sometimes called a Living Trust, you can be the trustee of your own trust and thus have complete control over the trust while you’re alive and competent.
Golden Years: You should have a Will, Health Care Directive and Power of Attorney at a minimum, and possibly a Revocable Trust. It is important to have these documents in place, and up to date, because advancing age increases the risk of dementia and the loss of capacity. Once incapacity occurs, you can’t sign these documents. A guardian and/or conservator may need to be appointed for you if you have not properly planned. Guardianships and conservatorships are a hassle, involve court supervision, and are relatively expensive. Planning also creates peace of mind for you that you’ve done the best that you can for your loved ones. Planning provides relief for your loved ones that they are following your wishes, and eases the burden of administering your estate.
It’s best to seek the help of an attorney that focuses on estate planning as it is those attorneys that are likely to be the most knowledgeable about all of the choices and issues that you may want to consider.
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