Creating an estate plan is one of the best ways to protect yourself and your loved ones from the uncertainty that can follow an unexpected life event. At Gratz Law, I believe that proper estate planning can spare your loved ones the expense, delay, and frustration that can result from managing your affairs after you pass away or become disabled.
Providing for Incapacity
If you were to become incapacitated, you wouldn’t be able to manage your own financial affairs. Many mistakenly believe that their spouse or adult children can automatically take over in the event they become incapacitated. Without proper planning, a spouse or adult children must petition a court to declare you legally incompetent for others to manage your finances. This process can be lengthy, costly, and stressful. Even if the court appoints the person you would have chosen, they may be required to come back to the court every year and show how they have managed your assets. According to Minnesota law, if you wish for your family to take over your finances immediately, you are required to designate someone you trust with the correct legal documents that give them the legal authority to withdraw money from your accounts, pay bills or manage retirement accounts.
In addition to planning for the financial aspect of your affairs during incapacity, I will help you establish a plan for your medical care. The law allows you to appoint someone you trust to make decisions on your behalf about medical treatment options if you lose the ability to decide for yourself. You can do this by using a health care directive that designates the person you choose to make such decisions and inform others of your preferred medical treatments, such as using extraordinary measures should you become permanently unconscious or terminally ill.
Providing for Minor Children
If you have children, your estate plan should address issues regarding the upbringing of your children. You should discuss with your attorney the possibility of both you and your spouse dying simultaneously or within a short duration of time. A contingency plan should identify the persons you would like to manage your assets and the guardian you would like to nominate for the upbringing of your children. I recommend giving careful thought to your choice of guardian, ensuring that he or she shares the values you want to be taught to your children. The person or trustee in charge of the finances need not be the same person nominated as the guardian. In fact, I can help you designate different persons in order to maintain a system of checks and balances. If these issues are not sorted out prior to deciding who will manage your finances and raise your children, they will be left to a court of law to decide.
Other issues to consider include whether you would like your children to receive your assets directly or whether you would prefer to have the assets placed in trust and distributed based on criteria you decide, such as age, need, or education. All too often, children receive substantial assets before they are mature enough to handle them properly, which is easily avoided with a written plan.
Planning for Estate Taxes
The IRS will want to review your estate at death to ensure you do not owe them that one final tax: the federal estate tax. Whether there will be any tax to pay depends on the size of your estate and how your estate plan works. Many states have separate estate and inheritance taxes that you need to be aware of. Many effective strategies may be implemented to reduce or eliminate estate taxes. Early planning is vital to implement many of these plans.
Charitable Bequests – Planned Giving
Your estate plan can provide for charitable organizations in a variety of ways. Depending on how your giving plan is established, it may also let you receive a stream of income for life, earn higher investment yield, or reduce your capital gains or estate taxes.
At Gratz Law, I work with my clients to establish an estate plan addressing their unique situation and needs. Once your estate plan is in place, you will have peace of mind knowing that you have provided for yourself and your family if the worst happens.