In this post we would like to provide some answers for people who don’t know what estate planning is. Once you know what it is, you may recognize why it is so important.
People accumulate assets during their lives. Once you pass away, your assets become part of your estate. Estate planning involves arranging for the transfer of these assets to new owners after you die.
Last Will
You may have heard of the legal device called a Will. If you have not, with a Will you can state your wishes in writing regarding how you want your assets to be distributed. The person who creates the Will is known as the testator or testatrix. The people who will receive inheritances are called the beneficiaries of the estate.
You should make sure that your Will is properly constructed. When you use a Will to direct the transfer of your assets after you die the administration of the estate will be supervised by the probate court. As a result, the Will should be constructed with the expectations of the probate courts in Minnesota in mind. When you engage a local estate planning lawyer, you should feel confident that your Will is properly constructed.
Revocable Living Trusts
In the above paragraph we mentioned the process of probate. This process can be time-consuming, and there are expenses that occur during probate. When you learn about some of the consequences of probate, you may ask your estate planning lawyer about probate avoidance techniques.
One very common probate avoidance device is the revocable living trust. With these trusts you can act as both the trustee and the beneficiary while you are alive. This is comforting to many people because you don’t lose control of the assets, and you can make changes to the trust terms.
You name successors to take over as trustee after you die. Once you pass away, the trustee that you named will administer the trust. This individual or entity will distribute assets to the beneficiary or beneficiaries according to your wishes as stated in the trust agreement.
The probate process is not applicable to the actions of the trust. As a result, the beneficiary or beneficiaries will receive asset distributions in a timely manner.
Incapacity Planning
A comprehensive estate plan should also address the possibility of incapacity. Sometime during your life, you may become unable to make sound decisions. To account for this possibility, you can name agents to act in your behalf in the event of your incapacitation via the execution of durable powers of attorney and/or healthcare documents.