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Healthy Aging: What to Think About When Planning Your Estate

Sep 29, 2017 05:00AM ● Published by Doug Erlien

September is Healthy Aging month. We checked in with Chuck Roulet, a nationally recognized attorney, author, and speaker to get his thoughts on estate planning.

Q: When thinking about estate planning, what are typical areas that people miss or don’t think about?

A: In my experience, the two biggest areas that people miss are planning for incapacity and their assumptions about how things work after they pass away. 

Statistically speaking, we are far more likely to become incapacitated in any given period of time than we are to pass away. And with advancements in medicine, we are far more likely to survive a heart attack, stroke, or a debilitating illness such as Alzheimers or ALS and end up being incapacitated for some period of time. If you become incapacitated and are unable to manage your financial affairs or to express your wishes for your health care, many times family is unable to step in and help without first obtaining authority to do so from a court. In some instances, and this surprises a lot of people, even your spouse may be required to seek authority from a court to manage certain financial affairs. 

If you are single or your spouse has predeceased you, absent the appropriate written authorizations ahead of time, your children or others cannot step in to help without first obtaining the authority to do so from a court. Getting authorization from a court can be expensive and time consuming and once the court gets involved, the court will remain involved until you regain the capacity to manage your affairs yourself or until you pass away. The ongoing court involvement increases the costs and stress of dealing with a loved one’s incapacity. 

The second area people miss is their assumptions about how things happen after they pass away are often wrong. As I speak and teach across the country, I find a lot of people mistakenly assume that after they pass away, their families can just step in and begin to sell and distribute their assets. In most cases, they must first get the authorization to do so through a court. It is known as the probate process. It can take a year or more, can be expensive and, if you do not have a written plan in place to determine who you want in charge and where you want everything going, the court will make those decisions based on state law and the outcome may or may not have been what you would have wanted. 

I would like to add that the biggest misunderstanding I see in the general public about estate planning in general is that they think a will avoids the probate process. It does not. A will is a set of written instructions to the probate court about how you want the probate proceeding to occur. Now, there may be good reasons for going through a probate proceeding. However, if you want your family to be able to avoid the probate process, then you should consider using a revocable living trust or using beneficiary designations to direct where your assets go after your passing. There are pros and cons to all of these options and that is something that you should discuss with a competent estate planning attorney.

Q: Why should everyone have an estate plan?

A: When I teach across the country I often open my presentation by telling the audience that they do not need a written estate plan . . . the caveat being, as long as they like the one the state provides for them and their family. In my experience, the state’s estate plan is usually the most expensive and time consuming plan for their family and is the most likely to lead to family disputes. 

If you want to ensure that your affairs are managed by whom you want, in the way that you want, and that your assets go to the people you want, then you need to have a written plan in place.

Another advantage of a written estate plan, is that you can protect the money you give to your loved ones in the event they are underage, have poor money-management skills, have creditors, or have a problem marriage. If you do not have a written estate plan and you pass away, your assets go to your heirs outright and without any protections. If they are underage, have poor money-management skills, creditors, or a problem marriage, everything you leave them could end up going to people you never intended. How would you feel if your lake home or cabin ended up going to your son or daughter’s ex-spouse and their family? With careful planning, you can protect the money you leave for your family so that they do not lose it to poor management skills, a divorce, or if something else were to happen to them.

Q: What risks exist if you don’t have an estate plan?

A: If you do not have a written plan in place, your family will likely have to go to court during your incapacity to obtain the authority to manage your financial affairs and your medical decisions. Your family will also need to go to court to obtain the legal authority to manage your assets after you pass away. As I mentioned, in my experience this is usually the most time-consuming and expensive plan and the one most likely to lead to family disputes. And as I mentioned above, in the absence of a carefully crafted plan, everything you leave to your family could be lost in the event they were to get divorced, have creditors or simply poor money management skills.

Q: Is getting an estate plan expensive?

A: Doing nothing and having your family have to involve the courts to manage your affairs during a period of incapacity and then again after you pass away is the most expensive estate plan you can have. 

The investment you make in a written plan that authorizes who you want to manage your financial affairs for you and to make medical decisions for you during your incapacity and who you want to manage your affairs for you, how you want them managed, and where you want everything going after you pass away is usually much less expensive than the alternative.

Q: How do I start?

A: The best way to get started is to do some research. I know it is a bit old-fashioned in this technological day and age, but go to the library and check out some books and do some reading on estate planning. Spend some time doing research online. However, you should be aware that some things on-line are great and some things are flat out wrong. 

The Minnesota Attorney General’s website has some good resources. Also, on our website www.Rouletlaw.com we have a large number of articles, videos and answers to frequently asked questions, you can also download any number of the free books and papers that I have written about estate planning. 

After you’ve done some research, the next step would be to schedule a meeting with a competent estate planning attorney to discuss your goals for your planning and how to go about putting a plan in place to meet your goals. When you schedule a meeting, make sure you ask whether or not the initial meeting is free or if there will be a charge for it. Attorneys are not required to give free meetings. At the meeting, make sure you ask questions about the background and experience of the attorney in the area of estate planning. This is a complicated area of the law and you want someone that is experienced.

Q: What else do I need to know that I may not have asked?

A: Estate planning is not something that is “one and done”. You should not do your plan and then set it on a shelf and forget about it. The laws keep changing and it is important to review your plan every few years to makes sure that it still accomplishes your goals and is up to date with any changes that have occurred in the law.


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