Over half of all Americans do not have an estate plan in place. That fact is not all that surprising given the fact that the average person is not familiar with most of the concepts and documents used in an estate plan. Although every estate plan is uniquely tailored to the needs and goals of the person creating the plan, there are some documents found in most plans. To help you familiarize yourself with these documents, the Grand Forks estate planning attorneys at German Law discuss three estate planning must-haves.
- Last Will and Testament — Typically, a Last Will and Testament serves as the foundation of a basic estate plan. One of the most important reasons to create a Will is that executing a Will ensures that you will not leave behind an intestate estate. Dying intestate means the state decides what happens to your estate assets using the state intestate succession laws. This typically means that only very close relatives will inherit from your estate. Instead of allowing that to happen, your Will allows you to make specific and/or general gifts to more distant relatives, unrelated loved ones, and even charities, organizations, and pets. In addition, your Will lets you appoint someone as the Executor of your estate. The Executor is responsible for overseeing the administration of your estate. Finally, your Will offers you the only opportunity you have to officially nominate a Guardian for your minor child should one ever be needed.
- Trust Agreement — Although they were traditionally used only by the wealthy to protect and guard the family fortune, trusts are now commonly found in the estate plan of the average person. A trust is a relationship where property is held by one party for the benefit of another party. A trust is created by the owner, also called a “Settlor”, “Trustor” or “Grantor” who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. Trusts are broadly divided into two categories, testamentary and living trusts. A testamentary trust does not activate until after the death of the Settlor whereas a living trust takes effect as soon as all the trust agreement is in place and the trust is funded. A living trust can be further divided into revocable and irrevocable living trusts. A trust can help achieve a wide variety of estate planning goals, including:
- Avoiding probate
- Incapacity planning
- Asset protection
- Medicaid planning
- Planning for parents with minor children
- Special needs planning
- Pet planning
- Advance Directive — Although the primary focus of your estate plan will undoubtedly be to ensure that your assets are distributed according to your wishes after you are gone; you should also ensure that your wishes are honored while you are still here during a period of incapacity. An advance directive helps you plan for that possibility. The State of North Dakota recognizes two types of advance directives, including:
- Power of Attorney for Health Care which lets you name someone to make decisions about your medical care—including decisions about life-sustaining treatments—if you can no longer speak for yourself. The Power of Attorney for Health Care is especially useful because it appoints someone to speak for you any time you are unable to make your own medical decisions, not only at the end of life. Your Power of Attorney for Health Care goes into effect when your doctor determines that you are no longer able to make or communicate your health care decisions.
- Health Care Instructions which is North Dakota’s version of a living will. It lets you state your wishes about medical care in the event that you can no longer make your own medical decisions. Your Health Care Instructions go into effect when your doctor determines that you are no longer able to make or communicate your health care decisions.
Contact a Grand Forks Estate Planning Attorney
Please join us for an upcoming FREE seminar. If you have additional questions or concerns about how you can keep your estate plan details private, contact a Grand Forks estate planning attorney at German Law by calling 701-738-0060 to schedule an appointment.