3 Important Facts to Consider When it Comes to Your Estate Plan

Most people know they should have a will drafted — but what they might not realize is that there are a number of estate planning strategies that can be used to carry out their objectives. Significantly, estate planning is crucial for people of all income levels and stages of life. Whether your goal is to provide for your family when you pass, reduce the estate tax burden your loved ones would incur, or plan for your philanthropic goals, your estate plan can be customized to ensure your wishes are satisfied.

Here are three important facts to consider when it comes to your estate plan:

1. Your Estate Plan Can Be Tailored to Your Individual Needs

No two families are the same — and no two estate plans should be alike. It’s essential to understand that an estate plan can be specifically tailored to your individual needs. The estate planning strategies you utilize should also take into account the needs of your beneficiaries, your financial situation, and your own objectives for how you wish your assets to be distributed. By using proper estate planning strategies, you can have peace of mind that your future wishes regarding asset and property distribution will be carried out.

Depending on your specific goals, your estate plan can be used to avoid substantial estate taxes and protect your assets from creditors, lawsuits, and misuse by beneficiaries. Notably, with an estate plan, you can provide for your beneficiaries in the manner you choose and determine how your assets will be divided among your loved ones. In your estate plan, you can also provide instructions regarding when your chosen beneficiaries will receive their inheritances. This may be particularly important if you don’t believe your beneficiaries are prepared to handle their inheritance until they reach a certain age.

2. There are a Wide Range of Estate Planning Tools that Can Be Used

While everyone should have a last will and testament, a comprehensive estate plan can include much more. There are a wide range of estate planning tools that can be used to help you satisfy your objectives. An estate plan doesn’t only address what will happen to you when you pass away, but it can also allow you to put a plan in place in the event you become incapacitated.

Some estate planning strategies that can be used can include the following:

• Will — A will is the foundation of every estate plan and sets forth instructions for how you wish your assets to be distributed upon your passing. It also appoints an executor who will handle your estate and carry out the terms specified in your will. If you have minor children, a will can be used to designate a guardian for them.
• Trusts — A wide variety of trusts can be used to help you accomplish your estate planning goals, including revocable trusts, irrevocable trusts, supplemental needs trusts, and pet trusts. Whether you seek to avoid probate, minimize estate tax consequences, or provide for your beneficiaries when they reach a suitable age, a trust can be specifically customized to preserve your assets and distribute your wealth.
• Financial power of attorney — A financial power of attorney can be put into place to appoint someone who will pay your bills and make financial decisions for you in the event you become incapacitated.
• Healthcare directives — A healthcare directive is a document that informs others of your wishes concerning medical care and appoints a person to make healthcare decisions on your behalf in the event of incapacity.

Without having at least a will in place, Minnesota intestate law would dictate how your assets are distributed when you pass away. This can result in consequences you had not intended. Similarly, without having an adequate plan in place for incapacity, the court might need to determine who would make decisions on your behalf if you become ill and are unable to do so. An incapacity plan and estate plan must be executed before you become incapacitated in order to be valid.

3. Your Estate Plan Can Be Updated When Major Life Events Occur

Estate planning is not a one-time event — it is an ongoing process. You should review your estate planning strategies on a regular basis, or when major life events occur to ensure the plan still reflects your wishes. For instance, changes in your family such as marriage, divorce, or the birth of a child may make your old plan insufficient. Updates to the law may also impact the adequacy of your estate planning documents. By revisiting your estate plan on a regular basis, you can have peace of mind knowing that it will continue to meet your goals.

Not only should you update your will and any trust instruments, but you should also take the time to review your investments and financial accounts to determine whether beneficiary designations should be changed. In addition, it’s vital to revise your incapacity plan periodically. While these documents do not expire, they should not be forgotten — you may need to make changes if your address, phone number, or agent designation need to be modified.

Contact an Experienced Estate Planning Attorney

A comprehensive estate plan can protect both your family and financial legacy — and there are a variety of estate planning strategies that can be used to carry out your wishes. A skillful estate planning attorney can assist you with creating a tailored estate plan to help ensure your goals are met. Located in Maple Grove, Mundahl Law works with clients throughout Minnesota for all their estate planning needs. To learn more about how we can assist you, or to schedule an appointment, contact Mundahl Law at 763-575-7930.