If you lack the confidence, or motivation, to explore estate planning options for your family, you’re not alone. A recent study by Everplans indicates more than a quarter of people surveyed felt they weren’t doing a good job preparing their estate. Sixty-nine percent of respondents considered creating a Will, but only thirty-four percent surveyed have actually done so.
So, why the indecision? If you’re like many others, you know that estate planning is, generally, a good idea, but don’t know how (or are scared) to talk about it.
We’ve assembled the basics of estate planning including a brief description of what estate planning actually means. Here are some essentials of estate planning, tips on the right estate plan for you, and advice for getting started.
Estate planning is the process of anticipating, organizing, and documenting a vision for your financial and medical future in the event of your death or disability.
Some goals for estate planning include: simplifying or eliminating the need for probate; identifying heirs and beneficiaries; providing for your family and loved ones; protecting and managing your assets; planning for incapacity; and minimizing taxes.
The attorneys at Gjesdahl Law use a variety of estate planning instruments to accomplish these goals, taking into consideration the client’s individual circumstances and needs.
An estate plan can be complex, but it doesn’t have to be.
For most of us, the essential parts of an estate plan include:
Most people should have an estate plan in place. It isn’t just about you - an estate plan is beneficial for those who depend on you, and those who would be responsible for you during serious illness.
Whether you’re young, single, and just starting your career; or you’re married, reaching retirement age, and wealthy, everyone has estate planning decisions to make.
Let’s examine a few common scenarios.
An estate plan for those under 30 and single consists of two basic considerations: what happens to your assets and who may be responsible for you if you become incapacitated?
You may not have many assets right now, but if you’re just starting your career, your net worth may increase quickly.
Accidents can happen, even to responsible people. If you die, your assets are likely to end up with your parents. If you’d like to direct those assets elsewhere, you’ll need an estate plan.
Death isn’t the only reason to have an estate plan.
If an accident leaves you incapacitated but alive, a properly drafted power of attorney allows you to designate someone to make decisions on your behalf.
If you’re living with a significant other but remain unmarried, creating an estate plan is important for the well-being of your partner.
In this scenario, if you pass away without a will, your significant other may end up with nothing if all your assets pass through your state's intestacy laws. This can result in your property going to your parents or next-surviving blood relative, instead.
Note: Intestacy law refers to the intestate succession statutes in each state. This statute distributes the wealth of someone who dies without a will to surviving family members.
If you’re like many, you may also purchase and own substantial assets, such as cars and homes. You may have them titled in “joint tenancy with right of survivorship” with your partner. Right of survivorship ensures that the surviving joint owner will take full ownership of that property in the event of your death, without the need for probate.
In addition to establishing beneficiaries and nominating who will help administer your estate and how, it is important for you to appoint a guardian/conservator of your minor children.
If you die without appointing a guardian for your children, a court will have to make that determination without your input. Naming guardians/conservators for your children may also prevent well-meaning family members from fighting with one another about who should care for your children.
In addition, If you’re young and relatively healthy, term life insurance is a cost-effective way to secure the financial future of your young family in the event of your death.
Most people have at least considered writing a will by the time they reach age 40. However, you may consider establishing a trust as an alternative estate planning tool.
Generally, there are two broad categories of trusts: irrevocable and revocable.
The primary benefit of a revocable trust is flexibility. A revocable trust can be changed at any time including:
Here are three reasons you may consider an irrevocable trust:
Perhaps the biggest benefit to both types of trusts is, upon your death, the assets in the trust will be transferred quickly and effortlessly to the beneficiaries you designated.
Creating an estate plan is essential for the elderly and those in poor health. Senior adults facing incapacity need specialized estate planning. While it is still important to have (or update) a will, power of attorney, trust, or healthcare directive, many seniors have concerns about financial security, preserving their dignity, and taking care of their loved ones.
How can senior adults be sure they have the right plan in place? They should:
No matter what station of life you’re in, the best place to start planning your estate is with an experienced and compassionate estate planning attorney. Look for an attorney who has experience with estate planning, elder law, and probate law.
At Gjesdahl Law, we’ve spent years helping people just like you through the estate planning process in North Dakota and Minnesota.
Check out our estate planning checklist and contact us today, we’ll be happy to answer any questions you have and help you get started.
Travis joined Gjesdahl Law, P.C. in 2017. His practice focuses on Family Law, including, divorce, child custody/visitation, support, and post-judgment modifications. He also d…
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