Many couples have asked me to do some basic Minnesota estate planning for them. My response is usually, ok, what kind of estate planning do you think you want done?
Although I get many answers to that question, there are similarities that arise time-and-again. For instance, today, a client asked me to draft a Will, Powers-of-Attorney, and a Trust for their son. I asked this person why they felt they needed a trust.
The client respondend that he had been told it was a good idea to get a some estate planning done just in case something happened to he and his wife. Then, the client said that he had also heard that it was a good idea to do a trust for the benefit of his children.
My next question to him was: why do you think you need a trust? His answer: I don’t know.
As an attorney who makes a living by drafting Wills, Trusts, and other estate planning documents, I have no problem drafting a Trust or other document if somebody pays me to do it. However, for many people, a simple Will and a Powers-of-Attorney for healthcare and finances may be all they really need.
In Minnesota, a Will dictatates what a person would like to have done with his or her property at death. Most people know that. The properly drafted Will also has provisions in it like how the deceased’s debt will be paid and who will serve as executor or personal representative.
In a typical Will, the personal representative is appointed to administer the deceased’s estate at their death. Often, people will know that they want their children or a spouse to receive all of their assets if they die. After the Will-maker’s death, the personal representative looks to the Will to lawfully dispose of estate assets and, eventually, distribute those assets to a spouse and/or children. In this way, a simple Will is an effective legal tool for disposing of assets at death.
A Trust is a document where a person makes a “pour-over Will” which “pours-over” all of the deceased’s asset into a legal vehicle known as a Trust. Using this arrangement, a Trustee is appointed to serve as a fiduciary for the Trust property. The Trustee acts much like a personal representative would under a Will. The trustee gathers all assets, distributes them to the Trust and then makes payments to the heirs as provided in the Trust. A Trust can also be virtually perpetual.
I often tell people that they can get a Trust, but that the Trustee will have a lot of additional responsibilites over the lifetime of the Trust. Many times, a simple Will is just as effective in terms of protecting a spouse or children if a person dies.
In sum, I think it is important for people to keep in mind that a Trust is not always the best option. It can be a great vehicle for doing proper estate planning and it certainly has its place. However, you should talk with a qualified Minnesota estate planning lawyer about whether a Trust or a simple Will is right for you and your family.
We were told when we had our trust made up that after a number of years 7 I think no one not even the state could touch the money in it…is this still true?
Hello: I cannot give legal advice through this kind of forum. I would guess that it depends on the type of Trust that was drafted and set up for you. There are many different types of Trusts and many different reasons to utilize them. In some instances, people want to utilize a Trust so that, should that be required to apply for state-funded medical assistance in their old age, they do not have to include the Trust assets on their application. Of course, there are many exceptions to every rule and the answer to your question would require a thorough legal analysis of your particular situation.