Basically, you need a will or a trust.  You have made the decision to see an attorney and finally get this done or maybe your will or trust is outdated and you are making another trip to the attorney’s office.  So, now what?  This article will discuss briefly some things you need to think about before going into the initial estate planning meeting and what you will most likely discuss at that meeting.

First, you need to understand the basic concept of the goals of planning an estate and what an estate actually is.  In short, an estate is all the property you own, real or personal property, accounts, businesses, cars, jewelry, furniture, in essence everything you own.  The goals of handling that estate in estate planning are often as follows:

A. Formulate a plan to transfer your property and assets to chosen beneficiaries through lifetime gifts        and upon death.

B. Minimize tax consequences including gift income and estate taxes.

C. Lessen the expenses of administration or avoid probate through title of assets.

D. Provide trusts for minors or others in need of protection from creditors or otherwise.

Next, you need to know how to start the process.  This is generally done by initially filling out an estate planning questionnaire and meeting with an attorney.  See the attached Estate Planning Questionnaire.  The basic goals of filling out the questionnaire will require some work on your part before you get to the attorney’s office.  Generally, this involves collecting documents and filling out some basic information as follows:

1. Basic contact information for you and your spouse.

2. Children’s names and dates of birth.

3. Previous marital history.

4. List of your assets and liabilities.

5. Selection of personal representatives

6. Selection of guardian

7. Selection of trustee

8. Selection of any independent parties to perform these roles.

9. List of beneficiaries and estate planning objectives.

Often, you will not have all of the information, which is fine, because you just want to do the best you can to fill out as much information as possible as part of the initial questionnaire. 

After you have reviewed the basic goals of estate planning and completed the questionnaire, you may have a lot of questions to be discussed with your attorney.  Discussion points often focus on addressing questions of differences between a will or a trust and whether the trust is revocable or irrevocable.  You will want to discuss your personal property and potential list of where that personal property will go upon your death.  You will review the title of your assets and discuss the importance of this, for example bank accounts listed as payable on death, life insurance to ensure beneficiaries are correct and retirement accounts to the extent beneficiary forms are completed correctly.  You will also want to discuss the title of your real estate and whether that is joint tenancy or tenants in common and potentially look at retitling under a transfer upon death deed.  Other items for discussion will include powers of attorney and healthcare directives.  You should also expect tips of how to avoid probate through titling of assets or gifting.

Often one of the major goals of estate planning is to reduce taxes.  You should review the following: 

A. Federal Estate Tax Exemption- $5,000,000 pursuant to the Tax Relief Act which currently extends through December 31, 2012;

B. Minnesota Estate Tax Exemption - $1,000,000;

C. Gift Tax Exemption ($5,000,000 lifetime)  Estate and gift tax are unified.  (ex. $2,000,000 in gifts still have $3,000,000 for estate);

D. Common ways to reduce taxes if your estate exceeds estate tax exemptions:

1. Transfer between spouses – unlimited marital deduction;


2. Lifetime gifts of $13,000 per one per annum not added to gross estate at time of donor’s death nor are such gifts subject to gift tax;


3. Use of family trusts;


4. Charitable donations; and


5. Fund college savings plans §529.

The free initial estate planning meeting often takes between 30 minutes to an hour and hopefully you should be able to get initial questions answered and direction on how to proceed for a first draft of documents on your estate plan.  If you have further questions, feel free to contact Chad McKenney of Donohue McKenney, Ltd. at 763-201-1450 or chad@dmlaw.us.

Disclaimer

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

 

This Article contains general information, not legal advice, and does not create an attorney-client relationship.  An attorney can advise you about how the law applies to your specific situation.

 

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