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The 7 Simple Estate Planning Must-Haves that Keep Your Family Out of Court

Lucere Legal gives estate planning advice
Categories: Estate Planning

If you’ve ever had a friend,  child, or even grandchild effortlessly solve a technology problem that had frustrated you endlessly, you can probably empathize with the millions of Americans who forgo estate planning because they fear it is highly complicated and confusing. Of course, neither estate planning nor technology are truly all that incomprehensible (as much as it may sometimes feel that way).

In fact, crafting a solid estate plan in your lifetime is infinitely less complicated than what your family will deal with if you pass before you’ve done so–and your children won’t have nearly as easy a time of it.

As an experienced estate planning attorney, my mission is to at least acquaint all families with the essentials of estate planning. Knowledge of the seven stages outlined below may be only the first step on a long journey, but you will immediately find yourself better equipped to face the road ahead.

  1.  Create a Trust.  If you would believe Hollywood, the wealthiest of people will lay out the entirety of their wishes in a will; inevitably to be read aloud in a large parlor full of the most extended of extended family, all hankering for a piece of the pie. The truth of the matter is more involved, but ultimately far easier for you and your family.While a will is an essential piece of any plan, adopting a will without a Trust will set your family on course for the courthouse after you are gone–whether your family is the sort to engage in contentious familial drama or not. Keeping your family out of court can be as simple as giving title of your entire estate to a Trust you have set up. Though more involved than simply writing out your wishes and hoping for the best, a Trust will save your family a significant amount of trouble..
  1.  Designate beneficiaries.  You’ve invested good money in those retirement accounts and insurance policies, so make sure they get passed on right. It is vital that you properly designate beneficiaries for these assets as they cannot be transferred through a will or a standard trust. You want the money to pass to the people you care about without spending a lengthy amount of time in the court system. Remember: as your life changes, your beneficiary designations may require review to keep them up to date.Two last notes: First, children below the age of 18 (whether by date of birth or level of maturity!) should never be designated as beneficiary. They need to be ready to receive the money responsibly. Second, those with assets over $150,000 in a retirement account should give thought to utilizing a Retirement Trust–taxes will take a smaller bite and the money can be meted out to children in moderation.
  1.  Avoid estate taxes.  No, you might not be one of the lucky few exposed to the federal estate and gift tax–which changes drastically every now and again–but 15 states and the District of Columbia levy state estate taxes for estates of a lower value. Minnesota has an estate tax (and a gift tax, too, by the way) and the exemption amount is only $3 million. While that may sound like a lot of money, it’s easy to reach the $3 million mark if you own a home, own a lake cabin, have a retirement account, and have a life insurance policy.On the federal estate tax, if your estate enjoys an exemption and is separate from that of a spouse’s that doesn’t, the two of you can take advantage of portability–where spouses are entitled to each other’s unused exemption – the surviving spouse must file the required paperwork to claim the exemption. The big takeaway here? Don’t just leave a filing cabinet full of documents for your family to muddle through without you–having a trusted advisor they can turn to will help the process immensely. If you would like to see if I can meet your family’s needs, please give me a call.
  1.  Leave a letter of instruction, or better yet . . .  A will is not the place for every little detail–whether it’s instructions for your funeral or how to prepare the family dog’s meal just the way she likes it. A simple letter of instruction can be left with your family or attorney, and they can see your final wishes through.Of course, the year isn’t 1783 and your options for recording your legacy go far beyond a handwritten-note: you can record your values, insights, stories, and experiences for the generations yet to come with a family legacy interview DVD–and a 1080p digital copy of the video should DVDs ever go the way of the 8-track tape. We provide this service at no additional charge for our clients because we know this is one of the things families value the most and is least often handled.
  1.  Sign a durable power of attorney.  There is more to estate planning than death; you want to be absolutely certain that your family can handle things should you become incapacitated. Managing your financial affairs may pose a real challenge to your family in both time and money, necessitating that they go before a court to have a guardian or conservator appointed. By signing a durable power of attorney that names someone you trust to handle these matters, the hassle saved is enormous–not to mention the many thousands of dollars! Better to leave the matter to a single document and a trusted advisor.
  2. Create an Advance Healthcare Directive.  You have plenty of wishes for your family, but what about for yourself? In the event that you are incapacitated or near death, you want to see your wishes concerning your medical care followed through. Much like the durable power of attorney, an Advance Healthcare Directive is a simple document designating a decision maker to see you receive the care you do or do not want when you are unable to make the decision for yourself. Federal regulations restrict any health care agent from discussing your medical care with others, so you must also sign a HIPAA release to allow medical professionals to share that information.
  3.  Organize your paperwork and digital files.  More and more of us keep a significant portion of our lives online–from banking to family photos. You will need to provide your executor with access to all of this digital information in detail, particularly website addresses and log-in information. All your important paperwork, whether truly paper or digitalized, should be in a single location your executor is familiar with–no hiding it all behind a portrait in the den! To make it easy for you, we have prepared this Digital Asset Inventory that you can use.

Bonus tip: Naming guardians in your Last Will alone for any minor children you have at home is not enough. Though the Last Will ensures they are cared for over the long-term, there is often a large time gap between when the need arises and when the will and your wishes are actually implemented. Our comprehensive emergency temporary guardian plan will ensure that your kids are cared for according to your instructions in the immediate term, keeping your kids out of child protective services and preventing anyone you don’t want raising your children from ever having a chance to take control.

Contact us at (612) 206-3701 or through our contact form to schedule a family estate planning consultation so we can sit down and talk about designing a plan that fits the needs of you and your family.  Surprisingly, sometimes the less you have, the more important it is to plan.

Image courtesy of Photostock / freedigitalphotos.net

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