“Unless You’re a Superhero, You Need an Estate Plan!”
Tessneer Law Office
As a young attorney, I’m frequently asked, “Do I need a will?” My answer: “You don’t just need a will; you need an estate plan!” Unfortunately, this opinion often falls on deaf ears with young and middle-aged adults who, in some ways, are the individuals most in need of an estate plan. These individuals often think estate planning is pointless because they lack significant property, let alone the money for an attorney. Others think they are a superhero and have an “invincibility complex,” as I call it, think estate planning does not apply to them because they are supposedly immortal. Many simply know nothing about this so-called “estate planning” stuff.
So, why is estate planning important for young adults, and how is it done?
Your “Life DESK”
When you start a new job, you try to have your desk or workspace clean and organized (not that many of us are ever successful in achieving that goal). You hope that good organization will make you more efficient and productive. The transition to your successor is smoother, too, since there is an organized system already in place. Now, imagine that your life is that job, and your loved ones are co-workers. A clear, organized estate plan earlier in life provides vision and simplifies later adjustments, but most importantly, it eases and simplifies the painful process of estate administration (translation: divvying up your stuff) for your loved ones when you leave the job of life. Constructing your estate plan, or “Life DESK,” early provides several benefits:
Direction: Gain the reassurance of knowing your estate will be administered according to your wishes. Dying without a will may result in unintended or undesirable outcomes related to your property distribution or the care of your minor children. For example, if a single, childless young adult dies intestate (translation: without a will), all of their property goes to his or her parents. That vintage, old-school Nintendo that you want your nephew to have? Better hope that Grandpa and Grandma give it to him.
Ease: Simplify estate administration for your loved ones after your passing and ease major decisions for them when you are incapable of making major medical or financial decisions for yourself. Do you want to donate your organs? Do you want to be cremated?
Savings: Effective estate planning is almost always less expensive than the costs of a probate proceeding.
Knowledge: Understand estate planning basics so you are better-equipped for larger-scale estate planning decisions later in life.
“I get it, but what is an estate plan, anyway?”
An estate plan is an integrated set of tools that promote the client’s long-term goals for the client’s children, property, and medical care. It usually considers four types of tools:
Wills and/or Trusts: A will designates who will receive your property at your death. It also nominates a personal representative (a.k.a. “executor”) and, perhaps most importantly, nominates guardians, conservators, and/or trustees for your minor children. A trust is a legal entity created for the benefit of designated beneficiaries and funded by some or all of your property. Trusts range from quite simple to incredibly complex.
Power of Attorney: This document appoints your “attorney-in-fact,” who has the authority to conduct financial and property affairs on your behalf at your instruction. If designated as “durable,” it remains effective even after you lose mental capacity, thus avoiding the costs of a conservatorship.
Health Care Directive: Also known as a “living will,” this document designates a person to make medical decisions on your behalf if a doctor determines you are incapable of making those decisions. It can also describe your wishes for medical treatment (e.g. “do not resuscitate”), organ donation, and burial arrangements.
Non-probate Transfers: Avoiding probate makes estate administration faster and less expensive. Such tools include Transfer on Death Deeds and beneficiary designations for life insurance or retirement accounts. These tools can help to minimize or eliminate many of the costs of probate and estate administration.
Take the Time Now
Tragically, life often proves to be short in a very literal sense. Unless you are Superman or Wonder Woman, take the time now to reflect and plan for your future as well as the future of your loved ones.
Ann M. Tessneer, Christopher L. Vatsaas
440 North Emerson Street, Cambridge MN 55008
763-552-8933 (phone) 763-552-8932 (fax)