While it’s Easy to Understand Why Most People DON’T have an Estate Plan, It’s also Easy to Learn Why they need to Act, and Act Quickly.
ESTATE PLANNING BASICS (P 1) ART
RAYMOND J. GERMAN NORTH DAKOTA ESTATE PLANNING ATTORNEY
You might have heard about it, or read about it, but if you’re like most people, you don’t really know a lot about estate planning. This is likely because of a number of reasons. First, you’re not a lawyer. Second, you don’t like thinking about your mortality. Additionally, you aren’t a senior, aren’t sick, don’t consider yourself wealthy, or you believe you have a lot of time to get around to it. While it’s easy to understand why most people don’t have an estate plan, it’s also easy to learn why they need to act, and act quickly. If you don’t have an estate plan, or don’t know much about estate planning, this short guide will give you the basic information you need.
WHAT IS AN ESTATE? The term “estate” can be confusing. When lawyers talk about estate planning, they’re not talking about a large piece of property, ranch, or real estate. An “estate” in this sense simply means all the property you leave behind after you die, or, in some cases, the property that has to be cared for if you’re incapacitated. Everyone has an estate whether they realize it or not. Your estate might be small, large, complicated, or streamlined, but you have one. Estate planning, therefore, is the process of looking at your estate, making choices about what you want to happen to it in the future, and then creating the
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right tools to protect those choices. Each step in the estate planning process is vital, and because estate planning laws are often very different between states, you must ensure that you do everything the right way. Acting without understanding your options or realizing what implications your choices have can be a disaster for you and your family.
WHY DO YOU NEED AN ESTATE? A common refrain heard by many estate planning lawyers often comes in a variation on the following question; why do I need to create an estate plan? After all, I’m not rich, or old, or married, or sick, etc. Answering this question with another question is often useful. Let’s assume you’re not any of the things that people commonly associated with estate planning. You’re young, single, in great health, and don’t have a lot of wealth you need to worry about. Even if all this is true, ask yourself this; who makes your decisions? You might think that you make your decisions. It’s obvious, after all. You pay your bills, decide what to do every day, choose what you want to wear, etc. But even those types of day-to-day decisions are part and parcel to estate planning. Who would make those decisions if, for example, you were involved in
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a car accident tomorrow? Who would decide what happens to your possessions if you died? If you don’t have an estate plan you do not get to make these decisions. You leave them up to others to make for you. Those others might be your spouse, your parents, a court, or even the laws currently in place in your state. In short, everyone needs an estate plan because there are some decisions you can only make by creating one.
WHAT IS INCAPACITY PLANNING, AND HOW IS IT DIFFERENT FROM ESTATE PLANNING?
We’ve talked about how everyone leaves an estate after they die, but there’s another situation in which estate planning becomes necessary. Should you become incapacitated, you’ll need someone to manage your estate on your behalf. That person will have to step in, take over your responsibilities, and make decisions for you. So what is incapacitation? Every adult is generally presumed by the law to be capable. This means that you can make decisions. You can, for example, enter into contracts, choose to get married, decide to embark on a career in professional bee keeping, etc. But not everyone has capacity. Adults with significant cognitive impairments, for example, cannot make decisions, and need someone else to do so on their behalf. Capable adults can become incapacitated by, for example, suffering a
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serious injury or developing a medical condition that robs them of their ability to make knowing
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decisions. When a once capable adult is rendered incapacitated, that adult also leaves an estate that needs to be managed. Incapacity planning,
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therefore, is really a form of estate planning. It focuses on what you want to happen if you’re no longer able to make decisions, instead of focusing on what you want to happen after you die.
WHAT DECISIONS CAN I MAKE THROUGH AN ESTATE PLAN?
Who will inherit your property? Who will make medical decisions for you if you’re sick? Who will pay your bills if you go on vacation? Estate planning answers all of these questions, and more. The types of questions you’ll need to answer, and the tools you’ll need to create, will all depend on your individual circumstances. Parents with young children, for example, will have to answer different questions than parents whose children are grown.
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Regardless of your circumstances, however, you
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must be sure that you answer these questions in a legally recognized manner. For example, if you want to make inheritance choices you can only do so in a small number of ways. Simply declaring your inheritance wishes to your friends, or writing a document and calling it your will, won’t do you any good.
WHEN SHOULD I START THE ESTATE PLANNING PROCESS? Short answer: “immediately.” Long answer: “as soon as possible.” It’s never too soon to begin estate planning, while delaying the process is never a good idea. Every capable adult needs to have a complete estate plan in place, and needs it now. Without a plan, you and your family could face a range of potential problems, almost all of which are preventable. If you haven’t started the estate planning process yet, contact the German Law Group so we can help you get started immediately.
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About the Author Raymond J. German As an attorney in Minnesota and North Dakota, Raymond J. German provides a wide range of estate planning and title services to his clients, with a primary focus on helping them provide for the security of their loved ones, reduce estate taxes and avoid or at least minimize the costs and delays of probate, all with a well-crafted estate plan. Mr. German defines the mission statement for Raymond J. German, LTD. Law Firm as "Helping one family at a time pass on values, beliefs and finances that can be shared for generations to come." Mr. German is well aware of the growing importance of estate planning and dedicates himself to informing the public of the need for careful attention to their specific situations. He is a frequent speaker on a variety of estate planning topics, regularly presenting educational seminars for the public as well as private groups. Raymond J. German approaches each challenge with not just solid expertise, but also remarkable enthusiasm and vigor. By constantly seeking simpler, better, and more effective ways of doing things, he continues to make a real difference in the lives of families and on the way estate planning is practiced by attorneys around the country.
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