The Only Estate Planning Documents You Really Need

Estate Planning Documents

Estate planning can seem daunting. You may have heard you need a long list of documents drafted in legalese that only an estate planning attorney can understand. 

However, while comprehensive estate planning is ideal, the truth is there are only a few key legal documents that are absolutely essential to have in place.

At Safe Harbor Estate Law, we’ve helped over 1000 Minnesotans create estate plans tailored to their unique needs and wishes. Over the years, we’ve found that while every situation is different, nearly every estate plan should include five core documents. 

These legal documents allow you to protect and provide for your loved ones when you can’t speak for yourself.

Last Will and Testament

Let’s start with the basics. A last will and testament is a legal document that lets you direct how your assets will be distributed after you pass away. It also allows you to name a personal representative (executor) who will be responsible for making sure your wishes are carried out.

Without a will in place, the state intestacy laws will determine who inherits your assets. This means your estate may not go to the loved ones you intended to provide for. We’ve seen this happen all too often for clients who thought they didn’t need a will.

In your will, you can specify who should receive your financial assets and personal property. You’re also able to designate guardians for minor children or dependents with special needs. This provides you with control over who will care for your loved ones if something happens to you.

It’s important to note that a will only deals with probate assets – those that pass through the court system after you die. Having beneficiary designations in place for non-probate property like retirement accounts and life insurance policies is equally important.

Living Trust

While a will is essential, its usefulness is limited by the fact that it has to go through probate before assets can be distributed. The court process ican take months or even years, and your estate remains public record.

That’s why we frequently recommend revocable living trusts in addition to a will. A living trust allows your estate to avoid probate and remain private. Assets in the trust can be transferred directly to beneficiaries without court involvement.

Living trusts are also beneficial if you own property in multiple states. With a trust, you only have to create one estate plan that covers all your assets, regardless of location. This avoids multiple probate proceedings.

A funded living trust transfers asset ownership from you as an individual to you as the trustee of the trust. You still maintain full control of your assets while living. Upon incapacity or death, your named successor trustees then manage the trust assets on behalf of the beneficiaries.

It takes more upfront investment of time and money to create and fund a living trust. However, the avoidance of probate, cost savings, and additional control over your estate is well worth it for most of our clients.

Healthcare Directive

No one likes to think about becoming incapacitated or unable to communicate. However, unexpected medical emergencies can happen at any age. Without proper documentation, your loved ones may not be able to access your medical information or make decisions on your behalf.

A health care directive allows you to name someone you trust to make medical decisions if you become incapacitated. The person you designate will be able to communicate with your doctors, access medical records, arrange care, and provide informed consent for procedures and treatments. You can provide specific instructions about treatments you want or don’t want.

Choosing your healthcare agent should not be taken lightly. Consider only very close family or friends who truly understand your values and wishes. You want someone assertive who will honor your written instructions without question.

In Minnesota, the health care directive serves two purposes. It both names your health care agents AND specifies your care preferences. By completing this single document, you can ensure your medical wishes are followed, and someone you trust can make decisions on your behalf if you cannot.

Durable Financial Power of Attorney

In addition to medical decisions, you need to consider how your finances will be managed if you become incapacitated. Bills still need to be paid, investments need to be managed, and assets need to be safeguarded.

A durable financial power of attorney allows you to delegate control over your financial affairs to someone you trust. This could be the same person as your healthcare power of attorney or a different individual.

The designated person can manage banking, pay bills, file taxes, and take other actions as your “attorney-in-fact.” You can limit the powers granted based on your comfort level.

Having a financial power of attorney prepared before incapacity occurs ensures there won’t be issues accessing your accounts or conducting business on your behalf. Financial institutions are otherwise very reluctant to grant account access without proper legal authority.

Beneficiary Designations

One of the biggest estate planning mistakes we see is the failure to name beneficiaries for assets like retirement accounts and insurance policies. Many people don’t realize beneficiary designations trump anything in your will.

These designations allow certain accounts to pass directly to the named beneficiaries upon death, avoiding probate. It also provides creditor protection in states like Minnesota.

It’s critical to keep your beneficiary designations up to date as life circumstances change. Events like marriage, divorce, or the death of a beneficiary require revisiting these designations. 

As part of a complete plan, your estate planning attorney should give you detailed written instructions about how to name your beneficiaries.  At Safe Harbor Estate Law, we provide you with beneficiary language that will ensure your designations align with your will and trust. 

Ideally, you should review all your beneficiary designations at least annually. Confirm the designated percentages and beneficiaries are aligned with your current wishes.

Get Your Estate Plan Started With Safe Harbor Estate Law

We hope this overview gives you a better understanding of the core legal documents every estate plan should include. 

While not complicated, estate planning is a specialized area of the law with quirks unique to each state. Don’t try to create your estate plan from scratch without input from a professional.

The attorneys at Safe Harbor Estate Law have guided over 1000 Minnesotans through the estate planning process. We offer initial Life and Legacy Sessions to review your situation and explain your options customized to your needs. Contact us today to get started creating the estate plan your loved ones deserve.

Author Bio

Margaret Barrett is the Founder and Owner of Safe Harbor Estate Law, a Saint Paul, MN, estate planning law firm she founded in 2013. With almost 15 years of combined experience in litigation and Minnesota estate law, she is dedicated to representing clients in a wide range of estate law matters. Her practice areas include estate planning, asset protection, elder law, and more.

Margaret received her Juris Doctor from the William Mitchell College of Law and is a member of the Minnesota State Bar Association and the Ramsey County Bar Association.

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