Here’s something I don’t think people ordinarily expect to hear from me: not everyone needs an estate plan. No will, no trust document. I was one of these people up until recently — let’s see why.
I was single, with no children. If something were to happen to me, I would have wanted everything I own to go to my parents. My family, though not wealthy, is secure and does not “need” my money or anything else I own, so I’m relatively sure no one would fight over my things. I also trusted that anything I own with sentimental value would stay in the family and be given to family members who would appreciate these things as much as I do.
In other words, I did not need to appoint a guardian for minor children, and I was totally okay with my state’s intestate succession statute (the state law that tells a probate judge and your estate’s personal representative where to send your things if you do not have a will). Non-probate assets — things with beneficiary designations, like IRAs and life insurance — are not affected by a will document. In situations like mine, the state’s intestacy statutes would take the place of a will. This “default” plan largely reflects what I would have put in a will anyway. If this situation describes you, then as far as controlling who gets your stuff is concerned, you don’t need my services.
In Minnesota, the intestate succession laws work (broadly) like this: if I don’t have a will and am unmarried, then everything goes to my parents. If my parents are not living, or if they disclaim (tell the court they don’t want my things), then it goes to my siblings. If no siblings, then the court would go up a “branch” in my family tree and see if I have any grandparents living. If no grandparents, then to my aunts and uncles . . . if no aunts and uncles, then to my cousins. If no cousins, then it goes up another branch, starting with great-grandparents, and then on down the line until they get to my second cousins. Etcetera.
But life changes; we grow. We get married, we have kids and grand-kids, we get a promotion and make more money, or maybe we start a small business. Once married, the intestacy statute divides my assets between my spouse and my other heirs. The percentage depends on whether my spouse or I have children from other relationships (we don’t). In my case, my wife Mary would get everything, since we don’t have kids (yet). Guess what? That’s how I want my will to read. Minnesota’s laws still reflect my estate plan.
But my estate plan does more than just divide my things. An integral part of estate planning is incapacity planning. What happens if I am unable to make financial decisions for myself, or unable to make decisions about my health care? A proper estate plan will create documents to address both of these issues by appointing an attorney-in-fact (“power of attorney”) and a health care agent.
And what if I want to give some money to my favorite charities? I’ve been active with animal rescues, and supporting them is important to me. What if I want specific things to go to specific people? I’d like my great-grandfather’s cuff links and my childhood collection of old baseball cards to go to my brother. Again, I trust my family, but I won’t have any real control if it’s not in a properly executed will.
What about a business? Do I want my family to take over my law practice? They’re not lawyers, so that’s a resounding no. I need to plan for this with language in my member control agreement or possibly a buy-sell agreement.
And, importantly . . . what happens when we have children? My will is where I appoint the guardians of our children if something happens to both of us. This is not an issue for us right now, but it might be later. If you do not have appointed guardians, then it is up to the probate court system to decide who will care for them. The court will act in the interest of your children, but they’ll do so without your input. I think deciding who will take care of your children is important to everyone.
To sum it up, if you have minor kids or if you have specific ideas for where you want your stuff to go, you need a will. Give careful thought to who should make financial and health care decisions for you if you are unable to do so for yourself; if you don’t have documents appointing these people, the court will have to conduct an expensive proceeding to appoint a guardian and possibly a conservator. A little planning now will give you the security of knowing everyone would be protected later.
Philip J. Ruce creates wills and trusts for families who want to feel secure that their loved ones are cared-for. Philip is a trust and estate attorney based in Minneapolis, Minnesota. Philip is the author of Trustee University: The Guidebook to Best Practices for Family Trustees. available at Amazon.com in paperback or Kindle edition (free chapter available here!) He also works with trustees and beneficiaries who need help with their trusts. You can contact him here.
Keywords: trusts and estates, Minnesota wills, revocable trusts, estate attorney, probate, estate planning, will