Estate planning attorney Philip Ruce of Stone Arch Law talked with KSTP Minnesota Live about estate planning. Urging people to be more aware of death and prepare for it, he discusses the importance of legal documents such as a will or trust, to protect our assets and secure our loved ones’ futures.
Key Discussion Points
Who Needs a Will?
When a person dies without a will, the default rules of intestacy statutes will come into effect, whether they like it or not. This lays down the specific order of people who will receive the assets of the deceased, without their control.
For a person to be able to control where their assets go after death, there should be some planning in place. This can come in the form of a will or revocable trust. Generally, over 18 years of age is the best time to get started on estate planning.
People under 35 are being more proactive in planning their estates. According to attorney Philip Ruce, “They have three things, I think, that are really going for them when it comes to this planning. They’re a very pragmatic group. They are planners. They’re more likely to get financial advice. They’re more likely to talk to professionals. They’re also very compassionate. They’re also very humanitarian.”
How Do You Go About Getting a Will?
Atty. Philip Ruce sites two important steps to getting started in estate planning. The first step is breaking the stereotype. There’s a common misconception that estate planning is only for older and wealthy people. However, anyone who does not fall under these categories still needs to plan their estate. The important factors to take into consideration include:
- Do you have a house?
- Do you have any money at all?
- Are there people that are going to be in charge important to me?
- Is it important for me to be able to decide what’s going to happen?
- Do we want to overwrite the default rules on intestacy statutes?
The next step is creating an inventory of assets or simply, making a list. It should include all the assets owned, as well as the type of ownership they are under (i.e. sole ownership, joint ownership, family-owned, etc.). The inventory should also include the kind of money and their corresponding amounts, including 401(k)s, IRAs, 403(be)s, taxes, brokerages, insurance, and bank accounts.
It’s important to note that estate planning doesn’t only have to be for assets that have financial value. Any item that wants to be protected and given to a specific person can be part of a will.
What is the Advantage of Creating a Trust?
While a will document goes to court and controls a process called probate, a trust is an estate plan that avoids lengthy court proceedings. It is more private, more efficient, and easier to enforce.
Also called a living trust or revocable trust, this estate plan replaces a will and brings the assets into a private family entity. Anything inside the trust is controlled by a private family agreement, hence, the assets can be transferred to the beneficiaries immediately after death. As a result, a trust is much less expensive and can be enforced much quicker.
How Often Should You Reevaluate Your Estate Plan?
People’s needs and preferences change over time. Because of this, it’s necessary to revisit and reevaluate their estate plans. As a general rule, a will should be redone every 10 years because it is an actual court document. On the other hand, a trust that does not go through probate can last up to 20 years before it needs to be reevaluated.
How To Find a Professional To Help With Estate Planning
According to attorney Philip Ruce, finding the right professional is an important step to take in estate planning. There are attorneys who do some level of it, but there are those who completely specialize in estate planning and probate, such as Stone Arch Law.
An estate planning attorney who specializes in the process and has a proven track record in estate planning can help walk their clients through the process and make estate planning easier and more accessible.
Stone Arch law provides educational resources on wills, revocable or living trusts, and probate. Go to stonearchlaw.com to access our volume of e-books, videos, and blog posts. To read attorney Phil Ruce’s full interview with Minnesota Live, refer to the transcript below.
Hi everybody. It is 9:22. Thanks for watching Minnesota Live. The pandemic, unfortunately, caused us to be more aware of death than probably ever before, yet fewer than half of American adults have a will, the legal documents that our loved ones rely on after we’re gone.
So my question this morning is, do you need a will? Who needs a will? Do you have to pay for a will? A lot of questions. So we wanted to bring in an expert on this topic. Estate planning attorney Philip Ruce from Stone Arch Law is here to kind of help us out. A lot of big questions.
And, I feel like when you say the word “will”, everyone’s like, “Ugh.”
Yeah. Nobody wants to talk about it, unfortunately.
It seems really heavy. You know?
It can feel that way. It can feel that way. And thanks for having me on today. It’s a pleasure. It’s an important document.
You know, it’s something that I think all people should have. I know that there are some questions and uncertainty out there.
So who needs one? I mean, like literally everyone needs one? Do you just need one when you get that first job and maybe you have the 401(k), or when you actually have something with your name on it?
There’s a lot of folks that don’t have one. I think there are a few reasons for that. It’s hard for me to say that everybody needs a will, but generally speaking, there is this set of default rules that are out there whether you like it or not. If you don’t know who’s going to be in charge, if you don’t know where your stuff’s going to go, there should probably be some planning in place. If you’re over 18 years old, arguably that’s the time to get started.
Okay. It’s funny that you bring up just over 18 years old because I was really surprised to learn that a lot of the younger generation, is it Generation Z, under 35, they are being very proactive about doing estate planning, which I was very surprised. I mean, good on them.
Absolutely. They have three things, I think, that are really going for them when it comes to this planning. They’re a very pragmatic group. They are planners. They’re more likely to get financial advice. They’re more likely to talk to professionals. They’re also very compassionate. They’re also very humanitarian. And I think if you take these three things together, what is estate planning other than making sure your loved ones and your causes are cared for?
So how do you go about getting a will? I mean, I know that you can go see someone in an office. You can get an attorney. There are now even forms online. I mean, is that a legit way to get a will? How do you go about it right?
Sure. So, there are four things I think I’d really focus on when we’re talking about how do you get started. The first one is we need to break those stereotypes. So there’s a stereotype that estate planning is for older folks. And that’s not true. I mean, older folks are probably going to get their planning done, but that’s not who it’s for necessarily. There’s a stereotype that it is for the wealthy and that is also not true.
When it comes down to it, ask yourself, do I have a house? Do I have any money at all? Are there people that are going to be in charge important to me? Is it important to me to be able to decide what’s going to happen?
We have a set of default rules that are going to happen whether we like it or not. Do we want to overwrite those rules? And if we don’t know what those rules are, or if we know what they are and we disagree, we have to do something to replace them.
Step number two is what we want to do is we want to take an inventory of our assets. And that’s law firm language for saying make a list. So what is it that you have? Do you have a house? Do you have a cabin? If you do, who owns it? Is it owned jointly? Is it owned by a family? But also, what kind of money is out there? And, I’m not talking just about how much money, but also what kind. You mentioned 401(k)s, IRAs, 403(be)s. There’s some tax planning that goes with that that’s very specific, so the type of money counts. Is it brokerage? Is it life insurance? Bank accounts? Don’t forget the heirlooms. I heard you mention photographs.
It doesn’t have to have financial value to be important enough to want to plan for. Do we want specific people to have specific items? And a professional can certainly help make that happen.
What would be the advantage of creating a trust? I hear trust and it seems complicated.
That is one of the most common questions we get. What a will is, and this is a big misconception. A will document goes to court. It controls the court process. It’s called probate. It can take a long time. It can be expensive. It can be a heartache. But, at least we’re controlling that court process. That’s what we want to do — we want that peace of mind that we’re controlling it. But, it does go to court.
For those that are trying to avoid this process, they want it to be private, they want it to be faster, they want it to be easier on their family, what we’re going to talk about is a living trust or a revocable trust. It’s a will replacement.
And what we do is we want our assets, house, cabin, but also our money to pass through a private family entity. Anything that passes through this thing is going to be controlled by our private family agreement. We’re going to get it done quickly. Much less heartache. Generally speaking, much less expensive in the long run. So it’s a way of avoiding court.
So Philip, how do you go about finding someone to help you with this. Because this all, as I mentioned, seems really heavy and important.
Finding the right professional, I think, is definitely a step that you want to take. There are a lot of attorneys who do some level of estate planning. There are also attorneys that do only estate planning and probate full-time. That’s all they do. Our office does only estate planning and probate.
A good estate planning attorney will be able to walk you through this in a way that’s accessible. They’ll be able to speak in plain language. You will leave that office knowing what you just talked about, and you’ll be very comfortable about what’s going to happen. You should feel very peaceful when you leave this process. It shouldn’t be as stressful as I think people think it has to be.
Our website does have some educational information on it. It has some free e-books, a lot of videos. It’s StoneArchLaw.com. Stone Arch like the bridge. L-A-W.com. It’s worth checking out.
Well, Philip, thanks for your time. Unfortunately, we’re out of time. But quickly, before you go, yes or no, do you get an online thing or not?
Good question, and I’ll try to make it quick. The question is, is there peace of mind in knowing that you did something yourself when you have no idea if it’s going to work? Who is going to be left holding the bag with that?
That’s what I thought you were going to say. And how often do you have to redo that? How often are you reevaluating it?
Because a will document is an actual court document, we usually say every 10 years, redo it. Trusts tend to last longer because they avoid court. We usually say about every 20.
Makes sense. Philip, thanks.
Thank you so much. If you need professional help creating an estate plan, we posted the contact information for you. Stone Arch Law. You can go right to MinnesotaLive.com.