Many Minnesota residents put off creating an estate plan. Some do so because they think that wills and trusts and the like are only for the wealthy. Some do so because they are still relatively young and think they'll have time to do it later. Others just don't want to think about the unpleasant implications.
When you learn a little more about estate planning, you will realize that none of these rationalizations makes much sense. We'll try to briefly explain why in this blog post.
Estate planning for your life
It's true that your will and some other estate planning documents go into effect only after your death, but that's not necessarily true for all of them. A good estate plan can include several documents that will be important to you while you are still alive. These can include:
- Advance health care directive: This document outlines what types of medical care you consent to, and what types you don't, in the event that you are unable to express your wishes when they become necessary.
- Power of attorney: This appoints a trusted person who will be empowered to make important decisions on your behalf — medical, financial or legal — in the event that you become unable to do so due to injury or illness.
- Guardianship: Similar to a power of attorney, but more far-reaching, a guardianship can appoint someone to be legally responsible for you in the event that you are no longer able to make important decisions on your own due to injury or illness.
- Living wills: These highly adaptable documents can protect your assets while you are alive.
Estate planning for your loved ones
The most important reason to plan your estate is to make things easier for your loved ones. This quality of an estate plan makes itself clear in many ways.
If you have young children, one reason for estate planning is especially important. In your estate plan, you can appoint a guardian who will be responsible for your children should you and the other parent die unexpectedly.
Even if you don't have young children, your estate plan can make things a lot easier for your loved ones after you are gone. This is true even if you don't have a lot of assets to pass on to them.
If you die without a will, the court will appoint a personal representative — in many cases, one of your relatives — who will distribute the estate to your heirs through Minnesota's law of intestate succession. Put simply, that means the probate process will distribute your estate to your next of kin.
If your family situation is fairly straightforward, this may be relatively easy: If your spouse survives you, your estate will most likely go to your spouse. If you have no spouse at the time of your death, but you do have surviving children, your estate will go to your children.
However, administering your estate is much harder in more complex family relationships. For instance, if you have children from a previous relationship, some of your estate should go to them, meaning there is less for your surviving spouse. The law of intestate succession doesn't directly provide for stepchildren at all. And, if you are unmarried and have no surviving children at the time of your death, the law of intestate succession could mean your estate will end up going to fairly distant relatives you barely know.
In any case, all this work of tracking down relatives is a headache for the personal representative and it takes time. The associated costs come out of your estate, meaning there is less to go around to your eventual heirs.
By taking the time to plan your estate, you can make your passing a lot easier for your loved ones. You may be able to provide them with a legacy. And you may even make things easier for yourself.