Estate Planning: What is your Legacy?

For most people, estate planning is not a dinner table conversation but rather is a topic that many of us are apprehensive about. There are a variety of reasons we avoid this topic, some people don’t want to think about their own death or disability, are confused by the process, don’t think they have enough assets to matter and associate high legal costs.

However, estate planning is not all doom and gloom. When we talk to clients, it’s from a perspective of: what are your dreams and wishes for your family or loved ones, what do you want to leave behind for them after you are gone, in other words, what is your legacy?

Estate planning is the fundamental component of establishing and securing your legacy. The framework to secure that legacy is through the estate planning documents, which are: (1) a will, (2) power of attorney, (3) health care directive, and (4) revocable living trust.

Here is a brief description of each of these documents and their purposes:

1. Will:  A will controls and directs the distribution of your estate upon death. It allows a person to distribute their assets to the people and in the proportions they desire, and names people or entities to act as fiduciaries in their best interests.
2. Power of Attorney:  The new Minnesota statutory short form power of attorney (POA) is an instrument that empowers an agent(s) (attorney-in-fact) to make financial decisions in the best interests and on behalf of the principal (the person authorizing the POA).  Some key features of the new power of attorney are: (1) its effective upon execution, (2) it terminates upon death of the principal or when it is revoked, (3) it may continue beyond incapacity and incompetence, which makes it durable, and (4) it is accepted by all Minnesota financial institutions.
3. Health Care Directive:  A health care directive is a legal document that allows a person to name another person(s) to make health care decisions for them if they cannot speak for themselves during their life, such as life sustaining procedures, artificial nutrition or hydration, including decisions after death like organ donations, autopsies, whether you want to be buried or cremated.
4. Trusts:   A trust is a legal entity that creates a fiduciary relationship between a trustee, who manages and administers the assets on behalf of beneficiaries, who receive the benefits of the assets in the trust.  A trust can be created during a person’s life (revocable or irrevocable) or at death (testamentary).  Generally trusts are utilized to avoid the probate process, provide privacy, manage assets for minors, or a spouse/adult who cannot manage it for themselves due to health reasons, age, incapacity, incompetency, or disability.

 Here are some benefits of an estate plan and how it can further your legacy:

1. Control: An estate plan provides you with greater control on how to distribute your assets during your life and after death.
2. Planning:  An estate plan enables you to enact a specified and detailed plan to who you want to distribute your assets to and in what proportions.
3. Protection:  An estate plan empowers you to appoint fiduciaries to act in your best interests, and to protect your loved ones by appointing guardians.
4. Minimizing uncertainties:  A well drafted estate plan can make the distribution of your estate clearer, simpler, and ease the stress of uncertainty.

Now that you can think about estate planning within the framework of planning a legacy, those discussions about it doesn’t have to be as daunting as we think.

For more information to continue this discussion about planning a legacy for your family or loved ones, please contact Encompass Law, PLLC at 612-708-5130 or email [email protected]

DISCLAIMER:   The information contained in this article is for informational purposes only and does not constitute legal advice nor does the transmission of this information intend to create an attorney-client relationship between sender and receiver.  Please be advised not to act or rely on any information in this article without first seeking legal counsel. For more information, please contact Encompass Law, PLLC.