While nobody wants to think about death or disability, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones. Proper estate planning not only puts you in charge of your finances, but it can also spare your loved ones of the expense, delay, and frustration associated with managing your affairs when you pass away or become incapacitated. Our estate planning attorney can assist and guide you through the process to ensure your wishes will be honored.
Estate planning is the process of arranging the management and disposal of a person’s estate during their life and after death. It involves the organization of an individual’s assets, including the allocation of these assets to beneficiaries and the handling of various legal and financial responsibilities. The primary components of estate planning include the creation of wills, setting up trusts, designating power of attorney, and ensuring proper health care directives are in place. The goal is to ensure the individual’s wishes are respected, their assets are protected, and their legacy is preserved for future generations.
Why Is Estate Planning Important?
- Control Over Asset Distribution: It allows individuals to control how their assets will be distributed after their death. Without a plan, the distribution of assets will be determined by state laws, which may not align with the deceased’s wishes.
- Protection for Beneficiaries: Proper estate planning can protect beneficiaries, especially minors, by providing for their financial needs in a structured manner. It can also protect adult beneficiaries from bad decisions, outside influences, creditor problems, and divorcing spouses.
- Reducing Taxes and Expenses: A well-designed estate plan can help reduce taxes and other expenses, ensuring that a larger portion of an individual’s assets goes to their beneficiaries rather than to tax payments or legal fees.
- Managing Legal Challenges: Estate planning helps manage legal challenges that might arise, such as challenges to the will or disputes among beneficiaries. A clear and legally sound plan minimizes the chances of such disputes.
- Planning for Incapacity: It’s not just about what happens after death. Estate planning also involves making arrangements for the possibility of incapacity due to illness or injury, ensuring decisions about health care and finances can be made according to the individual’s preferences.
- Peace of Mind: Knowing that there is a plan in place for the management and distribution of assets can provide peace of mind to the individual and their loved ones. It assures that their wishes are known and will be respected.
Revocable Living Trusts
A revocable living trust is a powerful estate planning tool that allows you to maintain control of your assets during your lifetime. When you create a revocable living trust (also known as a living trust or revocable trust) you become a “Grantor.” As Grantor, you are the beneficiary and can would serve as the trustee of the trust during your lifetime. All income from assets in the Living Trust are still reported on the grantor’s tax return. Therefore, as the grantor you are free to buy and sell property in the revocable living trust and add or remove assets at any time. A Revocable Living Trust also includes provisions to have your assets managed during any periods of incapacity and privately transfers assets to your loved ones after you pass away.
Much like a will, a revocable living trust is a legal document that provides for the management and distribution of your assets after someone passes away. But unlike a Will, a Revocable Living Trust allows for assets to transfer to beneficiaries quickly and privately after the grantor passes away without having to get the courts involved. It also includes provisions to have your assets managed during any periods of incapacity.
Most people know about wills and their basic purpose – to ensure that one’s hard-earned assets go to the right beneficiaries when an individual passes away. However, wills can be used for a lot more than simply dictating who gets a person’s antique lamp collection. Here’s a list of some of the very valuable things a will can do:
- List who gets what: The most common purpose for a will is to name which individual, or group of individuals, will receive particular property belonging to a person when they pass away.
- Name guardians for children: Typically, a will is a document that states who should raise a person’s children if something happens to the parent. The will also usually contains at least one alternate in the event the first choice cannot serve.
- Establish trusts: In many cases, a person may not want a child or loved one to receive all of the property that they are inheriting at once. Or a person may want the beneficiary to be able to use the property for a while, and then for it to pass on to someone else. In that situation, an individual may choose to use a trust. A trust holds property on someone else’s behalf. In wills, trusts are commonly established for minor children, so that someone else can manage the children’s money until they reach a certain age when their parents believe they will be able to manage it. Trusts are also commonly used in second marriage situations – a person may want to allow a spouse to have access to certain property while the spouse is living, but for that property to ultimately pass to the decedent’s children. Trusts can help accomplish that goal.
- List funeral wishes: Although this is also done in other documents too, a will commonly states whether an individual wants to be buried or cremated, and where the body should be buried or the ashes should be spread. Sometimes, wills contain other information about funeral wishes too like where it should take place and even what readings might be recited.
- Tax planning: Wills can be great tools for tax planning to avoid federal or state estate or inheritance taxes. This can sometimes be accomplished by setting up various trusts.
- Naming executors and trustees: A will usually states who will be the executor of an estate, which is the person who will carry out a deceased individual’s wishes listed in the will. Wills can also name the trustee of any trusts established in a will, which is the person who will be in charge of carrying out the instructions of the trusts.
While wills can serve as powerful estate planning tools, they are only effective if they are properly drafted to suit the needs of each individual. An estate planning attorney can review all your options with you and establish a will in a manner that ensures your wishes will be honored.
How Our Edina Estate Planning Attorneys Can Help You
Joel P. Mullen is an experienced estate planning attorney in Edina who can guide you through the often complex and nuanced process of planning your estate. We understand that each individual’s situation is unique, which is why we offer personalized services tailored to meet your specific needs. Our focus is on providing comprehensive support to make the estate planning process as smooth and efficient as possible, ensuring that your objectives are met with the utmost care and attention.
Contact Our Edina Estate Planning Lawyers Today
Our dedicated team is ready to assist you with all your estate planning needs. Contact us today to schedule a consultation and take the first step towards a secure future for you and your loved ones. Whether you are drafting a new will, revising an existing one, or exploring other estate planning options, our attorneys in Edina are here to guide you every step of the way.
Mullen Law, P.A. offers estate planning services to clients in Edina, Bloomington, Eden Prairie, Minneapolis, Minnetonka, and the surrounding areas in Minnesota. We are dedicated to helping our clients navigate through their estate planning needs with a focus on personalized attention and care.