Top 5 Steps to Take While Preparing an Estate Plan in Minnesota
Estate planning is an essential tool to manage your finances and property if you become incapacitated or pass away suddenly. An estate lawyer can help ensure that your family will be financially secure should anything befall you. Below are a few common steps to take when preparing your estate:
Maintain Life Insurance Properly
Life insurance can be an essential piece of estate planning. Life insurance proceeds can provide liquidity that an estate can use to immediately settle any final debts and provide a quick cash flow to certain beneficiaries. However, a sudden influx of insurance proceeds may trigger estate taxes for such heirs. Be sure to consult an estate planning and/or tax attorney to minimize unnecessary estate taxes for an estate.
Draft Your Estate Plan Properly
An estate plan must be drafted correctly in order to be executed. Fortunately, the requirements for writing a will or trust are low compared to contracts or other legal documents.
Minnesota requires that the testator be a legal adult in order to write a will, meaning that he or she must be at least 18 years of age. In Minnesota, the will must be executed in front of two witnesses who must also sign the will. Handwritten wills in Minnesota are generally not permitted, though a handwritten will executed in another state may be accepted depending on the specific facts.
A trust, on the other hand, is a legal instrument in which another person or other entity holds legal title to property for the benefit of others. The trustor must name a trustee to administrator properties placed in trust for certain beneficiaries. The trustee then administers or distributes the property for the beneficiaries’ use after the trustor passes away. Be sure to consult an estate planning attorney to ensure that your will or trust is executed correctly.
Control Your Digital Estate
Estate planning has gone digital as Americans spend more and more time online. Some people may own social media accounts or digital currency worth more than some real estate. Even if you don’t use social media, most banks, retirement accounts, and other financial institutions have a website for their customers to use.
Additionally, digital property is not just about finances. Social media posts, images, and films can have significant emotional and sentimental value. Login information for emails and websites should also be archived and organized so that your executor or trustee can locate them quickly. You may even consider appointing a separate digital estate manager from your main executor or trustee if you have a particularly large digital estate.
Your family and legal representatives should be able to quickly access bank accounts and/or social media accounts to preserve or transfer important digital property or even money if the need arises. An estate planning attorney can help ensure that your digital estate is properly organized and managed.
Prepare a Living Will
A good estate plan should include an advanced healthcare directive or a living will to ensure that your family has a plan in case you become debilitated. Large unexpected medical bills can rapidly drain an estate if your estate plan is not prepared for such an event. For example, a bad automobile accident can render a person in a coma for an extended period of time. A living will can guide loved ones if you are unable to express your wishes following a severe injury or accident.
Review and Revise Your Estate Plan
Life continues even after you’ve set up your estate plan. You may get divorced, remarried, have a new child, or have a death in the family. On the property side, you may sell real estate, have your assets divided during a divorce, sell off stock, or inherit additional property yourself. These life events will impact your estate plan and your estate plan should be updated as soon as possible afterward.
If your estate plan is out of date, it may be impossible for the trustee or executor to properly follow the estate plan. If a will gives a car to a child but the car was sold several years ago, the child may not inherit anything. While the law may step in to prevent absurd results, such as giving property to your named ex-spouse rather than your current spouse, such laws will differ by state. The best way to prevent any misunderstandings is to periodically revise your estate plan.
Do I Need An Attorney For Estate Planning in Minnesota?
If you are trying to draft a will or trust, you should consult with a skilled estate lawyer in Minnesota. A skilled attorney can help draft the essential legal documents and help set up your will or trust. It is important to work with a local attorney so that you receive the most relevant legal advice regarding your estate in Minnesota.