No. A will simply directs to whom your assets should go upon your death and allows you to designate guardians and conservators for your minor children.
You can name beneficiaries on your life insurance policies, annuities, IRA’s and other retirement plans. You can name beneficiaries on your bank accounts using a Payable on Death (POD) designation and on investment accounts using a Transfer on Death (TOD) designation. You can also own assets as joint tenants on real estate or you can name beneficiaries for your Minnesota real estate using a Transfer on Death Deed.
You may not. If your only concern is the transfer of assets on your death and naming beneficiaries for your minor children, a simple will may suffice.
However if you think you may want some management of your assets for your children before they reach a certain age (for example age 25), a trust created for that purpose is often the best solution. Failure to anticipate your children’s need for financial assistance in the event of your death will mean that at age 18, each child will receive his or her inheritance from her estate to be used as that child sees fit. Many people are uncomfortable with that solution
The cost of probate includes attorneys fees for meeting time, document preparation and court appearances (in certain circumstances), as well as court filing fees and publication fees. Depending upon the complexity of the estate, probate can cost as little as $1,500 and can be substantially more than that in more complex situations.
In addition, probate generally takes at least 4 to 6 months before assets can be effectively distributed to your heirs. It may take two months or more before any assets can be sold or even used to administer the estate. Probate is perhaps the most inefficient way of transferring your assets and managing your estate.
Most estate plans for a married couple can be completed the cost of between $1,000 and $2,000. If there is greater complexity with family issues or your estate itself, fees can be $2,500 or more.
In Minnesota, as in most other states, if a person dies without a will, the state has a law which determines who gets your assets. This will vary considerably depending on your marital status, whether your children are from a single marriage and which of your relatives survive you if you should die unmarried and without surviving children or grandchildren.
A Health Care Directive allows you to name one or more people to make medical decisions for you when you are undecided or unable to communicate. It also allows you to let your wishes be known about end of life treatment, organ donation, burial or cremation upon your death and wishes about your funeral.
If you have assets that require documentation for another person to deal with, a Power of Attorney is one answer. Putting the asset in a trust where a trustee has control is another. But in the case of IRAs or other retirement plans, which cannot be titled in the name of your trust, you will need to give your Power of Attorney to someone who can make decisions on your behalf if you are unable to.
While most people think of estate planning as planning for your death, proper estate planning includes preparing for the possibility of physical or mental disability and medical issues. The primary goals include having your assets pass easily to your heirs, reduction or elimination of estate taxes and continuity of asset management if you are incapacitated. A Health Care Directive is also an essential part of your estate plan so that loved ones can make medical decisions for you when you are unable to do so.
A Will, Durable Power of Attorney and Health Care Directives are minimum requirements. In order to avoid probate, frequently a living trust is added. If a trust is indicated, deeds to real estate should be prepared to move homes and vacation residences into the trust. There are many other documents that may be appropriate depending on your circumstances.
If you have a change in your family, net worth, or state of residence, you should have your estate plan reviewed. A significant change in the tax law is another change that should make a review desirable.
A trust is a legal contract created by the Trustor (property owner) with a Trustee (manager) to manage property for the beneficiaries of the Trust.
Avoids the time, expense and aggravation of a formal probate in the county where property is owned.
Can avoid probate in other states where the Trustor owns real estate.
Trust administration at death is private; no public court records.
You should name a trusted family member or friend with some financial expertise and good organizational skills. If you have nobody who meets those criteria, you should consider naming a professional trustee like a bank or trust company.
Avoid leaving assets directly to minors. Because they are not adults, such assets should be left in trust to be distributed at a time when each child has reached a certain age, often as late as 30 or older. Financial maturity is not often an attribute of adults in their twenties.
Contact a qualified estate planning attorney who can guide you through changing beneficiaries on certain accounts, drafting deeds or assignments and making sure that the assets are correctly re-titled in the name of the trust.