Photo Cred: Anchor Lee
Creating an estate plan can be an intimidating process. If you feel intimidated, overwhelmed, or even anxious about acknowledging your own mortality, consider breaking down the comprehensive estate plan into its basic elements. Taken on their own, these four components can be more manageable and easier to complete.
Power of Attorney (“POA”)
A POA allows you to appoint someone (a.k.a. your “attorney-in-fact”) to manage your financial interests during your lifetime, particularly after you become unable to do so yourself. The person you designate can do things like pay your bills, enter contracts, sell your home, and/or manage your bank accounts. Having a POA may also allow your family to avoid the expense and more burdensome administrative duties of a Minnesota conservatorship, should you become incapacitated.
Health Care Directive (“HCD”)
Should you become incapacitated or unable to express your health care wishes, a health care directive can provide critical guidance to your medical providers about what kind of care you want (and don’t want). Also, just as with a POA, you can appoint a health care agent to make medical decisions on your behalf. Having a HCD may allow your family to avoid the expense and more burdensome administrative duties of a Minnesota guardianship, should you become incapacitated.
Wills and Trusts
Whether you complete a basic will or establish a more complex trust, these tools serve as the “meat” of your estate plan. They are the documents that, among other things, nominate the person(s) you would like to serve as your personal representative (a.k.a. executor) and/or trustee, nominate a person to serve as guardian of your minor children, and specify how your tangible assets and real property should be distributed.
Other documents you might want to have as part of your estate plan include Transfer-on-Death deeds (to remove your home from your probate estate); contact lists for all known heirs, beneficiaries, and agents; and/or a list of digital assets, accounts, and passwords. To be clear, none of this supporting information is mandatory, but it can prove to be valuable information for your personal representative who is tasked with the job of determining all of your probate assets and communicating with your heirs.
These are the basic elements of an estate plan. It is our hope that by pulling them out individually, it makes the prospect of planning your own estate a little less daunting. You don’t have to have everything in place right away; you can start with one or two elements and add on over time.