Last week I had the pleasure of providing a lecture for the newly built Yorkshire Assisted Living in Edina, Minnesota, built and managed by Tealwood. I was asked to provide a presentation on Estate Planning for potential new residents and families of new residents, plus prospects for the new facility.
I focused my presentation on the event theme, which was “Get Your Ducks in a Row”, taking the audience through the highlights of an Estate Planning Check-Up.
The problems associated from dying without a Will or a Trust was described by using the example of the Estate of Prince Rogers Nelson. Prince has an estimated $330 million worth of gross Estate. Because he had no Will or Trust established there was a fight in court over who would receive his Estate. Additionally, his effective tax rate on these assets for Minnesota and Federal Estate taxes combined will be over 50%.
Many in the audience had a Will or a Trust. Still, it is advisable to have a Will or a Trust reviewed, and possibly modified, every 2 to 5 years.
This was highlighted by the fact that the Minnesota Probate Code had 11 new amendments in 2016. Additionally, Minnesota adopted the Uniform Trust Code in 2007. An older Estate plan could have unintended consequences on how things are handled after one's death.
Estate taxes have also changed greatly, which requires a review of Estate plans. Minnesota will have five changes to Estate Taxes between the years 2014 and 2018. The Federal Estate Tax rates have changed every year since 1997.
Many Estate plans do not take into consideration these new changes to the law, nor do they consider personal factors that could impact an Estate. Sometimes it is not the person drafting the Estate plan that would have issues. Many times beneficiaries will have creditors or lawsuits that could end up draining Estate assets. One auto accident, a slip and fall at a personal residence, or the divorce of a beneficiary could put Estate assets at risk.
Another point highlighted was the giving of personal property and declaring your intentions with all assets to prevent disputes between beneficiaries. Many times fighting over small knick knacks or trinkets will encourage anger that creates bigger fights over more valuable assets such as real Estate, vehicles, and cash accounts.
To assist potential new residents at the Yorkshire, as well as the others in the audience, I emphasized that Estate Planning is a good time to inventory your property. Many clients come to my office and do not have a full grasp on what they actually own. Also, many clients do not know or do not remember who their beneficiaries are on various financial plans. Estate Planning is a great opportunity to ensure that these decisions are made now when you have the time and mental capacity to do so.
Lastly, I discussed with the audience how to protect themselves if they were unable to make decisions on their own behalf. Healthcare directives allow you to guide your healthcare agent to make medical decisions if you are unable to communicate. Healthcare agents can also be provided guidance for your funeral plans. Power of attorney documents allow you to appoint an attorney-in-fact to carry out your financial affairs and protect your assets and accounts both during your incapacity, and even if you are geographically unavailable to transact business.
Please feel free to review the Estate Planning Check-Up that is downloadable from this site. I would be happy to review it with you and assist you with the proper creation and maintenance of your Estate Plan