Estate planning is the process of anticipating and arranging, during a person’s lifetime, for the disposal of their estate. Estate planning can be used to eliminate uncertainty over the administration of an estate and frequently maximizes the value of the estate by reducing taxes and other expenses. The ultimate goal of estate planning can be determined by the specific goals of the client, and may be simple or complex as the client’s needs dictate. During this process a client has an opportunity to select the person or persons that will act of their behalf (personal representative, trustees, guardians for minor children, etc.) These people are referred to as “fiduciaries”. During the the estate planning process a client’s assets are analyzed as are the way they own the assets. The estate planning attorney is then able to made recommendations to ensure that the client’s assets pass in the manner they wish with minimal shrinkage due to taxes or administrative costs. A side benefit of the estate planning process is that the client frequently obtains a lifetime benefit because of the recommendations made by the estate planning attorney. The law of estate planning sometimes overlaps with elder law, or medical assistance planning which involves additional planning for long-term care and preservation of assets. A major advantage to doing an estate plan is to be able to designate who will be administered your estate, taking care of your minor children, etc.
Probate is the process required for distributing a person’s assets at death. However, probate may not be required if all of the decedent’s assets are “non-probate”. There are also simplified forms of probate e.g., if the decedent’s assets are below stated amounts. The term “probate” is interpreted as “proving the will” which involves going through the probate process required to probate a will with the end result being a legal transfer of the decedent’s assets to those persons entitled to them.
A probate asset is an asset that a decedent owned in his/her own name at death. A non-probate asset is any number of other assets such as joint tenancy with right of survivorship, assets passing by beneficiary designation, assets passing by transfer at death designation, assets owned by a revocable (living) trust, etc. Non-probate assets pass by operation of law so do not need to be probated.
A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a person called a Settlor in Minnesota. Other states use the terms Trustor or Grantor. A trustee is given legal title to the trust property but is obligated to act for the good of the trust beneficiaries and has a fiduciary obligation to do so. The trustee may be either a person or a corporate trustee (bank). There are many types of trusts categorized into two basic types; revocable and irrevocable.
This is the most common form of trust It derives its name from its characteristics. As it name implies, this type of trusts can be amended or revoked at anytime. It is also called a living trust because it goes into effect right away or during lifetime (or intervivos). There are many potential benefits to this type of trust including probate avoidance (assets in such trust are deemed “non- probate” so no probate is required to pass the assets), privacy (can be administered privately and without public disclosure as with probate), lifetime advantages because such trusts are accompanied by other documents such as powers of attorney and health care directives, flexibility in planning because the trust can be amended, changed or revoked if circumstances change, potential for continuing trusts for loved ones and such trusts can be coordinated with a client’s other planning and documents.
Very likely. I have been asked this question many times and clients almost always receive a benefit from these documents. While it is possible that one can approach old age without a health care problem or incapacity, this is unlikely since statistically, with longer life spans, it is six times more likely that you will have a health or incapacity problem that it is for you to die. These type of documents also need to be signed when a person has capacity to do them, so one should not wait to do them.
Probably. If a single person dies without a spouse or children or descendants, and without a will the state of Minnesota has a will for them, the intestate law. This law directs how one’s assets are to be distributed if they die without leaving a will or trust. The usual result of intestate probate is that the single person’s assets pass first to their surviving parents and then to their siblings.This result may be alright but modern single people typically marry later than past generations and frequently accumulate significant estates that may require tax planning. Also many single people have specific alternative ways that they want their assets distributed. Also, an estate plan allows you to select the people you want to act on your behalf while the intestate law states the priority of appointment of these fiduciaries, which may not be the people you would have selected. The latter applies to all people, single or married.
Estate Planning Attorneys have the training and experience to work with clients and families in identifying their goals and in carrying them out. Estate planning doesn’t just deal with the mathematical division and distributions of one’s assets. Everyone wants to feel that their lives mattered and that their beliefs and values will be carried forward to future generations. This may require specific language to carry out a client’s unique plans.
Perhaps you can but consider the potential consequences. A will or a trust is the end result of the estate planning process. If your estate is simple and if you are certain how you want your estate distributed, it might be possible to obtain a form online. However, you will then have bypassed the planning process and may miss important planning steps. Also be careful that you select the correct form. Many online forms come out of California or other community property states (Minnesota is a common law state). Also make sure that you sign (execute) the will or trust properly so that it is valid under state law. If you want to “go it alone,” I suggest that you review the Minnesota Statutes that regulate wills and trusts.