Paul O. Dillon, Attorney at Law

Avoid Common Estate Planning Mistakes

Otherwise sound estate plans can be undermined by critical mistakes. A recent article from The National Law Journal, “Estate Planning Mistakes—2025 Annual Refresher—Part 3 [Podcast],” outlines how to avoid a number of common mistakes and protect the estate plan and the family from the effects of these missteps.

Not providing complete and accurate information. Transparency is critical when creating an estate plan. There are times when life’s circumstances may be sensitive and difficult to share with a professional.  However, secrets can tear estate plans to bits. If assets are being hidden to avoid paying taxes or if there is an unacknowledged biological child, the integrity of the estate plan could be jeopardized.

This is especially relevant in a blended family. If a prior marriage or a child from a prior marriage is not disclosed, the result could be litigation between heirs. Hidden debts or undisclosed assets may surface after death, leaving executors and heirs with tax liabilities and family strife.

Failure to coordinate estate and financial instruments. Financial investments, life insurance policies and estate plans are rarely all started and completed at the same time. However, these and other accounts need to be coordinated so they work together. If a will says all three children should receive equal shares of an estate, but only one child is named as a beneficiary on a life insurance policy, the three are not going to receive equal shares. Provisions with different instructions in trusts, wills and beneficiary designations will only lead to trouble.

This is a relatively easy problem to solve; it just takes time and attention. Review estate planning documents every few years, including wills, trusts, any account with a beneficiary designation, power of attorney documents and life insurance policies. An estate planning attorney is always willing to speak with a financial advisor and CPA to ensure that the estate plan and financial tools will work together.

Talk with your family about your estate plan. A lack of trust and communication leads to estate plan failure and family fights. If you are uncomfortable talking with family members, consider setting up a family meeting with your estate planning attorney. If the family is spread across the country, an online video meeting can be coordinated.

Even the best of intentions can lead to problems. If one family member is struggling financially while the others enjoy robust earnings, parents may wish to leave more of their estate to the child having money problems. Talking about this openly with all of the siblings while parents are still living is far better than giving the family a major jolt when expectations aren’t met. If the conversation doesn’t happen, a painful legacy may be created.

Relying on Joint Tenancy to transfer assets. It may seem like joint tenancy is an easy way to transfer assets upon death. However, it can undo the intentions of a will or a trust. Assets held in joint tenancy pass directly to the surviving tenant, transferring outside of the estate plan. If a parent puts one child’s name on a joint account but not others, the child on the account is under no legal obligation to share the asset with their siblings, setting the stage for family discord and often, litigation.

Joint tenancy should be reviewed along with all other ownership and estate planning documents to consider how it will impact the estate plan. Revocable trusts may offer the same flexibility, while also ensuring that assets are distributed according to the intent of the overall estate plan.

Relying on informal agreements. A verbal promise between close family members may feel good. However, it won’t be enforced if one party fails to live up to their promise. This situation arises frequently when family heirlooms or personal possessions are promised but end up in another person’s hands. Documenting these promises and discussing decisions with heirs can avoid disputes and damaged relationships.

Effective estate planning requires attention to detail, communication and the guidance of an experienced estate planning attorney. Ensuring that the estate is properly planned has the added bonus of protecting the relationships between family members, which is the most valuable legacy of all.

Reference: The National Law Journal (Dec. 17, 2024) “Estate Planning Mistakes—2025 Annual Refresher—Part 3 [Podcast]”

Avoid Common Estate Planning Mistakes

Otherwise sound estate plans can be undermined by critical mistakes. A recent article from The National Law Journal, “Estate Planning Mistakes—2025 Annual Refresher—Part 3 [Podcast],” outlines how to avoid a number of common mistakes and protect the estate plan and the family from the effects of these missteps.

Not providing complete and accurate information. Transparency is critical when creating an estate plan. There are times when life’s circumstances may be sensitive and difficult to share with a professional.  However, secrets can tear estate plans to bits. If assets are being hidden to avoid paying taxes or if there is an unacknowledged biological child, the integrity of the estate plan could be jeopardized.

This is especially relevant in a blended family. If a prior marriage or a child from a prior marriage is not disclosed, the result could be litigation between heirs. Hidden debts or undisclosed assets may surface after death, leaving executors and heirs with tax liabilities and family strife.

Failure to coordinate estate and financial instruments. Financial investments, life insurance policies and estate plans are rarely all started and completed at the same time. However, these and other accounts need to be coordinated so they work together. If a will says all three children should receive equal shares of an estate, but only one child is named as a beneficiary on a life insurance policy, the three are not going to receive equal shares. Provisions with different instructions in trusts, wills and beneficiary designations will only lead to trouble.

This is a relatively easy problem to solve; it just takes time and attention. Review estate planning documents every few years, including wills, trusts, any account with a beneficiary designation, power of attorney documents and life insurance policies. An estate planning attorney is always willing to speak with a financial advisor and CPA to ensure that the estate plan and financial tools will work together.

Talk with your family about your estate plan. A lack of trust and communication leads to estate plan failure and family fights. If you are uncomfortable talking with family members, consider setting up a family meeting with your estate planning attorney. If the family is spread across the country, an online video meeting can be coordinated.

Even the best of intentions can lead to problems. If one family member is struggling financially while the others enjoy robust earnings, parents may wish to leave more of their estate to the child having money problems. Talking about this openly with all of the siblings while parents are still living is far better than giving the family a major jolt when expectations aren’t met. If the conversation doesn’t happen, a painful legacy may be created.

Relying on Joint Tenancy to transfer assets. It may seem like joint tenancy is an easy way to transfer assets upon death. However, it can undo the intentions of a will or a trust. Assets held in joint tenancy pass directly to the surviving tenant, transferring outside of the estate plan. If a parent puts one child’s name on a joint account but not others, the child on the account is under no legal obligation to share the asset with their siblings, setting the stage for family discord and often, litigation.

Joint tenancy should be reviewed along with all other ownership and estate planning documents to consider how it will impact the estate plan. Revocable trusts may offer the same flexibility, while also ensuring that assets are distributed according to the intent of the overall estate plan.

Relying on informal agreements. A verbal promise between close family members may feel good. However, it won’t be enforced if one party fails to live up to their promise. This situation arises frequently when family heirlooms or personal possessions are promised but end up in another person’s hands. Documenting these promises and discussing decisions with heirs can avoid disputes and damaged relationships.

Effective estate planning requires attention to detail, communication and the guidance of an experienced estate planning attorney. Ensuring that the estate is properly planned has the added bonus of protecting the relationships between family members, which is the most valuable legacy of all.

Reference: The National Law Journal (Dec. 17, 2024) “Estate Planning Mistakes—2025 Annual Refresher—Part 3 [Podcast]”

What Should You Do If Your Estate Plan is Out of Date?

Keeping up with life's changes is part of estate planning. For those who own farms, ranches, or other family businesses, trusts and estate plans created years ago are unlikely to serve the family today, says a recent article from Successful Farming, “How to Handle an Outdated Estate Plan.” Adding to the issue, adult children may not always agree with the plan their parents created.

The solution begins with a consultation with an estate planning attorney experienced with farms, ranches, or family businesses. They can see the whole picture in a way owners often cannot. The process begins, as it does for non-business owners, with an inventory of the family’s assets. The nextstep is to determine the family’s goal: keep the farm in the family and sell it to fund the owner’s retirement or another option. Review the old estate plan to see if it’s relevant. It’s better to address the issue and create a new estate plan.

Depending upon what kind of trusts were created in the past, they may still work with the updated estate plan. An estate planning attorney can help restate the trust's provisions if it’s a revocable trust. If it’s an irrevocable trust, it may need to be decanted and “poured” into a new trust if your state’s laws permit this.

What ownership entities were created by the original estate plan? If the parents hold controlling interests, they can modify operating agreements to update the plan. A centralized management system and exit strategy can be created as long as the numbers work.

Life insurance policies’ expiration dates need to be reviewed in case something can be done with them before they expire. If there is a cash value, it might be used to purchase a better policy. Cash benefits from life insurance are a means of expanding operations, funding buyouts, or equalizing assets between heirs.

Fluctuations in land value mean that farmers, ranchers and real estate owners need to change their purchase prices. Review the numbers periodically to ensure that the valuation model and funding strategies still work. It may be wise to set a fixed or maximum price, depending on the situation.

Getting children to agree with their parents’ plan for the future takes more than parents explaining the plan. Schedule a family meeting with advisors, including an estate planning attorney, accountant and financial advisor, to review the reasoning behind your decisions and how they will benefit. Having non-family members present for the discussion can often take the emotions out of the discussion, changing the dynamic and allowing the next generation to feel empowered for the future.

The worst option is not to act on an outdated estate plan. The cost and stress of leaving a thriving enterprise to the next generation without an estate plan or a succession plan could leave the family with no choice but to sell the business.

Reference: Successful Farming (Nov. 7, 2024) “How to Handle an Outdated Estate Plan”

Estate Planning Success Supported by Speaking with Heirs

Because we are reluctant to discuss wills, many families only learn what their loved ones want to happen with their property after funeral services, and grief has made everyone fragile. A recent article from Success, “Will Power: Why Transparency in Estate Planning Matters,” explains how family members can share their wishes with loved ones during difficult times.

People not used to dealing with large sums of money may not have plans for tax-efficient wealth transfer. This includes parents who have devoted their lives to saving for retirement and need a plan both to use their accumulated wealth and pass it on to the next generation. Without an estate plan, inheritances could be diminished or lost entirely to taxes.

For beneficiaries, knowing they may be receiving an inheritance should lead to advance planning. Inherited IRAs, for instance, need to be inherited and retitled correctly, or the entire amount could be subject to taxes. Anyone expecting to inherit assets should speak with an estate planning attorney to learn what steps they need to take beforehand.

Discussions about inheritances and last wishes are opportunities for families to connect on a deeper level than planning a Thanksgiving menu. Providing ample time to have these discussions can also allow families to work through any issues before it’s too late.

These are not easy conversations. They may not be possible for every family. Another option is to create a personal message via video or write a letter explaining your intentions. Whichever way you decide to communicate your wishes, it doesn’t need to be an overly long message. A simple explanation of what you’ve decided and why may be enough.

When you create an estate plan, start by inventorying all your assets, checking how they are titled and finding out which assets have beneficiary designations. Assets like life insurance policies, investment accounts and some bank accounts with beneficiary designations pass directly to beneficiaries and are not included in your probate estate. Check on beneficiary designations to make sure you’re not leaving a surprise present to a college pal you haven’t spoken to in three decades—unless you want them to receive a surprise.

Be especially careful if you decide not to give your heirs equal distributions. This can often lead to litigation against the estate, assets lost to legal fees and damaged family relationships. Your estate planning attorney will have strategies for how you might distribute your assets to be fair to all of your loved ones.

Surprises are good for birthday parties but bad for estate planning. Revealing a hidden secret in a will after you have passed will shadow your legacy.

If you haven’t updated your will in more than three or four years, now is a good time to tackle this task. Include your new, up to date will in a folder with other documents, including Power of Attorney, Living Will, Healthcare Proxy and other estate planning documents. Ensure that your executor knows where the folder is, so it can be accessed in case you become incapacitated or pass.

Having an estate plan created by an experienced estate planning attorney, who will be able to guide you through the process, is a gift to the family. You’ll enjoy the peace of mind of knowing you did the right thing.

Reference: Success (Sep. 12, 2024) “Will Power: Why Transparency in Estate Planning Matters”

What’s the Best Way to Simplify an Estate?

Yes, you need to create your estate plan and decide how you want your money and real estate property to be distributed upon your death. However, there’s more. A recent article from Morningstar, “Your family will love you even more if you simplify your estate,” says you should also simplify your assets to simplify your estate.

How you have your financial life arranged now may seem simple enough to you as you navigate it regularly. You know where your accounts are, how much is in each account and who the beneficiaries are of any account, having the option of naming a beneficiary. If you don’t know who the beneficiaries are, take care of this right away.

However, for your executor and your heirs, those same accounts are a series of unknowns. If a single financial advisor doesn’t handle your investments, can you bring them under one person’s management? If you have accounts in more than one bank, can you consolidate them into one bank?

A record number of boomers will turn 65 in 2024. The “great wealth transfer” of a generation owning $72.6 trillion and passing this along to younger generations has led many to prepare accounts and heirs for what will come in the next twenty years. This includes creating a comprehensive estate plan with a will and trusts. Most experienced estate planning attorneys advise their clients to create a revocable living trust to avoid probate, which can be costly, stressful and time-consuming.

Probate is considered one of the most complex parts of inheritance. Distribution will be far simpler if you can remove most of your assets from being part of your probate estate. Trusts can also protect assets in a way wills cannot. It’s far more challenging to contest a trust than it is a will. If your family is prone to infighting, you want to place assets into trusts!

Talk with your estate planning attorney about a “pour-over will.” This is a will directing any assets not already in your trust to be “poured over” into the trust upon your death. You’ll also want to have a financial power of attorney, healthcare power of attorney, living will and HIPAA release. These documents allow the people you designate to take care of your financial, legal and health if you should become incapacitated.

Once your estate plan is in place, start consolidating accounts. If you have multiple IRAs or 401(k)s from various employers, combine them. You've set your heirs up for trouble if you have individual stock certificates in your bank’s safe deposit box. First, the safe deposit box will be sealed upon your death, unless someone else owns the box. Second, stock certificates must be settled through a stock-transfer company, which requires proof of the owner’s passing and proof of their being legitimate heirs. New accounts need to be opened up for the stocks to be transferred to, and only then can they be retrieved the money from the sale of the stocks.

It can also be difficult for heirs if they have annuities, government-issued bonds, or bank CDs. They all must be found, and distribution rules must be uncovered and processed.

After having your estate plan created and consolidating accounts, create an inventory of all accounts, including digital assets (usernames and passwords will be needed), and place them in a file with keys to your safe deposit box, life insurance policies and estate planning documents in one place. Make copies of your credit cards, front and back as well.

Having this information in one place will make managing your estate far easier. Your loved ones can focus on their memories and not be overwhelmed by the details.

Reference: Morningstar (June 18, 2024) “Your family will love you even more if you simplify your estate”

Spring Cleaning the Business of Your Life

There’s no bad season for spring cleaning—although most of us tend to feel the need to get things in order when spring arrives. What should be on your list? The article “7 spring cleaning and other annual steps to get your financial life in good shape” from AZ Central gives some valuable suggestions.

Address the paper problem. Piles of paper bills, statements and other documents can easily become overwhelming. Streamline your paperwork by organizing files better and reducing what you keep. For instance, keep one end-of-year statement from your bank and investment accounts if you still get paper statements. Even the IRS is doing it—recommending keeping only three years of income tax returns on hand.

Do you need so many different accounts? If you’ve got credit cards you don’t use, do you need to have them? Don’t close the accounts if you’re about to take out a loan, as the activity could affect your credit score. However, if you can, get rid of any excess cards. Visit big credit reporting companies to learn how to close the accounts without creating a financial hiccup.

Is it time for an annual portfolio review, too? Set up a meeting with your financial advisor to review your accounts once a year to be sure they are properly balanced. The old 60% stocks/40% bonds ratio is being challenged by many. However, it may be your best option, protecting you from downturns in the market while still having some investments poised to benefit from upswings. One asset management company’s analysis says the traditional 60/40 mix could have generated a 9.3% average annual return in a portfolio first started in 1950.

Check what you’re paying in fees and other expenses. This may take some digging, but you may be (unpleasantly) surprised at what you find. How much are you spending on fees on mutual funds or exchange-trading funds? If the amount you’re paying in fees is the same or more than you’re earning, you’re losing money. You can’t control the market, but you can manage fees and expenses.

Update or create your estate plan. If you don’t have an estate plan and have minor children, make an appointment with an experienced estate planning attorney as soon as possible. Wills are used to name guardians for children. Without a will, the court will decide who should raise your children. Your will is also used to name an executor who administers your estate after you pass. It can be your spouse, partner, or whoever you feel would be best suited. Without a will, a court-appointed administrator will be named. Be careful about online wills, which can create more problems than they solve. If the will doesn’t comply with your state laws or isn’t executed properly, the court could deem it invalid.

Check beneficiary designations. Beneficiary designations are used for life insurance policies, retirement, and investment accounts, some bank accounts and other assets. The person named your beneficiary will receive the asset when you die, regardless of your will. Beneficiary designations supersede any will instructions, so ensure that they are up to date.

Taking care of these matters isn’t as much fun as planting a garden or planning your summer vacation. However, knowing the business aspect of your life is well cared for will give you peace of mind so you can relax and enjoy the coming season.

Reference: AZ Central (May 19, 2024) “7 spring cleaning and other annual steps to get your financial life in good shape”

What Women Preparing for Retirement Need to Know

One woman’s story is a warning to everyone. Four months after Caroline S. married for the second time, she received a notice from the IRS about back taxes her new husband owed—$1,600 would be taken from her tax refund to make up the difference. Her new husband blamed his ex-wife, saying she hadn’t prepared their returns correctly. A few months later, the IRS put a levy on the couple’s new joint bank account and froze the funds because he was not paying withholding taxes.

As described in the article from Kiplinger, “What Every Woman Needs to Know Before Retiring,” it took two years and $50,000 of Caroline’s money to clear her debt to the IRS. There had been no sign of her second husband’s having financial problems and no reason for her to be concerned about the IRS until there was. Her advice: Keep your eyes wide open and your accounts separate.

Not knowing their household’s financial situation is among the biggest missteps women make. If they find themselves single, through divorce or death, the challenges can be daunting. Women tend to live more years in retirement and earn roughly 84 cents for every dollar men earn. Women represent 55% of all Social Security beneficiaries aged 60 and older, and their percentages rise as the population ages. The highest rate of divorces now involves couples between ages 55 and 64.

However, youth is no guarantee of financial security. One couple was in their mid-forties when the husband died. The wife, a self-proclaimed planner, had wisely addressed estate planning and legal issues when they were relatively young. There were living wills and trusts established, and life insurance policies purchased. The husband had gone to medical school after a successful career in engineering and had $100,000 in outstanding student loans, which were canceled because only his name was on the loans.

Even with all of their planning, this widow had a lot to deal with, managing trusts, bank and investment accounts, credit card transfers and the avalanche of paperwork and digital assets following the death of a spouse.

How to prepare? Have a complete team of advisors, including an experienced estate planning attorney, a financial advisor and an accountant. An estate plan should be integrated with tax planning and household budgets. This checklist can help:

• Have the money conversation before moving any relationship into serious waters. Make sure that you’re on the same page as your partner and get full disclosure of their financial status.
• Don’t leave financial matters for your spouse or partner to handle without being involved at all.
• Familiarize yourself with everything – all property, all accounts, all debts—and be a part of all decisions.
• Fully fund your own 401(k), IRA or other retirement account.
• Consider adding life insurance and long-term health insurance to cover future hardships.
• Make sure wills and other estate planning documents are current and update them periodically.
• Ask your estate planning attorney whether each person in the couple needs to have their own trust.
• Keep individual loans in separate accounts, so the surviving spouse will not be liable for the debt.
• Don’t mingle accounts and funds any more than absolutely necessary to run the household.
• Keep at least one credit card in your name only. An individual credit history can go a long way if you are divorced or widowed.

Reference: Kiplinger (Feb. 24, 2024) “What Every Woman Needs to Know Before Retiring”

What Does Your Estate Plan Include Besides a Will?

A last will and testament is a part of your estate plan, one of several essential documents to explain your wishes. However, a will is only the first step, and having an estate plan becomes more important as conditions and your life change says the article “Planning Ahead: Your estate plan does not end with a will” from The Times Herald.

Assets Need to Be Divided into Those Titled in Your Name Alone, Jointly Titled and Beneficiary Designations

There are different rules for how your assets are distributed upon your death. Looking at your assets and how they are owned will clarify what will happen when you pass. The review could be a surprise, especially if you haven’t updated designated beneficiaries in a while. You might be spared any shocks if you’re married and have traditionally titled assets.

If assets like your home, bank and investment accounts are titled jointly with your spouse (known as Tenants by the Entireties), those assets will pass directly to your spouse upon your death. If you have IRAs, 401(k)s, 403(b)s, or similar retirement accounts or life insurance policies, you likely named your spouse as the beneficiary. If you’ve remarried, make sure those beneficiaries are updated.

There are exceptions. You may have kept certain assets in your name only, especially if you have been married more than once. These generally will pass by will, unless they pass by beneficiary designation.

Consider how assets will pass if you become a widow or widower or are single or divorced. In most cases, your assets are mainly in your own name. You may not have named “secondary beneficiaries,” which you could have done when the original documents were drafted. It’s not too late to do this now.

Ask yourself if you want your adult children to inherit directly or if you want assets to go to grandchildren. Note that minors cannot inherit property, so talk with your estate planning attorney about creating a trust if you wish assets to go to grandchildren. When creating a trust, you can decide if you want the funds to be given to the beneficiaries in small sums over many years, when they reach certain milestones, or to be used solely for their education.

Consider the Entire Picture—Beneficiary Designations

Many people hold assets in the equity of their home or tax-deferred funds, like IRAs. Updating these beneficiary designations is a critical step for your estate plan. A difficulty might arise if you are single, divorced or widowed and don’t specify how you want these funds to be distributed.

Keep the Paperwork in a Safe Place

Once your paperwork for your will, life insurance and tax-deferred funds are completed, keep them in a safe place and tell your beneficiaries where they are located. Online access can be tricky or impossible. So many financial institutions have been bought and sold that we can’t count on their having documents properly archived.

Reference: The Times Herald (Jan. 14, 2024) “Planning Ahead: Your estate plan does not end with a will”

What are the Basics of Estate Planning?

Every adult needs to have an estate plan, regardless of how large or small their estate is. The pandemic prompted many Americans to realize this, according to a recent article from Forbes, “What Is Estate Planning? A Guide And FAQ For Investors.”

Estate planning starts with a last will and testament and key documents including a Power of Attorney, trusts and medical directives. Creating an estate plan allows a family to protect investments and other assets during disability or illness and ensure the distribution of property after death. At the same time, taxes and probate are minimized or avoided.

Estate planning provides many benefits to the individual and their families. One of these is relieving stress and uncertainty during a difficult time.

Estate planning also addresses planning for the care of minor children in the event both parents pass away.

A last will is a legal document addressing property, assets and investments and their distribution after the owner’s death. If there is no will, the state’s laws determine how the estate will be distributed. A will is also used to name a guardian for minor children, so every young family should have a will. Without a will naming a guardian, the court will make decisions about the children’s guardian, possibly appointing a person the parents might not have chosen.

Trusts are outstanding estate planning tools used to solve a wide variety of planning problems. There are Marital Trusts used to pass assets to a spouse without incurring estate taxes and Bypass Trusts used to hold assets for a surviving spouse but structured so that when the surviving spouse passes, the assets go to the named beneficiaries—typically children from a prior marriage.

Trusts are also used to make donations to charities. Some are created to make a gift and create a steady income stream for beneficiaries.

Your estate planning attorney can recommend which type of trust works best for you.

Every adult should have a Power of Attorney in place. This gives someone the legal power to act on behalf of another person if they cannot act for themselves. The POA can be drafted to be broad, allowing the agent to act on all matters, or limited so the agent can only perform specific tasks.

Medical directives are perhaps the hardest to contemplate, since no one likes to imagine themselves at death’s door. These are also critical to give family members and healthcare providers information about what a person wants in the event of extreme illness. A Heath Care Proxy allows another person to make critical decisions for you.

Beneficiary designations are often ignored and can undo an estate plan. Let’s say that you have a life insurance policy purchased several decades ago, and in the intervening years, you divorced and remarried. Who is the beneficiary named on the life insurance policy? If it’s your ex-spouse, they’ll get an unexpected windfall when you die. All accounts with beneficiary designations should be reviewed every year or two to ensure that they are still appropriate.

Estate planning may seem daunting. However, working with an experienced estate planning attorney will make the process easier and ensure that your wishes are carried out and your family will be protected.

Reference: Forbes (November 28, 2023) “What Is Estate Planning? A Guide And FAQ For Investors”

How Estate Planning Conveys Your Wishes

When musical legend Prince died, it took six years in court to determine who would inherit his worldly possessions because he didn’t have an estate plan. While most of us aren’t dealing with a Prince-sized estate, no family needs to go through the turmoil and expense of fighting over a loved one’s estate. That’s where estate planning comes in, as explained by the article “Let your dying wishes be known by estate planning—before it’s too late” from Star Tribune.

The biggest step is getting started.

Estate planning involves taking inventory of all your assets and liabilities and deciding how you want survivors to deal with these upon your passing. The main legal methods used are wills and trusts. However, a comprehensive estate plan also includes health care directives, or living wills, along with powers of attorney for financial and health care decisions.

Your estate plan should include funeral plans. However, these must be available immediately after your death, so loved ones can follow your wishes. If they are in your will, they may not come to light for weeks after your funeral has already taken place.

Prepaying for your funeral may not be possible for everyone. However, finances aside, it’s best to have all these estate planning angles covered in advance. Have a conversation with your family, so they understand your wishes and goals.

Probate is the legal process dictating what happens to assets when you die. Who makes these decisions depends upon whether you have a will. If you have no will, a court-appointed representative deals with your estate according to state laws. Property is gathered, inventoried, debts are paid and what’s left over is distributed to heirs.

In most states, estates pass to spouses. If there is no surviving spouse, children receive any inheritance or obligation in equal shares. If there are no children, assets might go to parents, siblings, nieces, nephews, or other relatives. Every state has different laws, so consult with an estate planning attorney to learn what your state will do in the absence of a will.

In blended families, this can become more complex, since stepchildren have no legal right to inherit.

If there are no heirs or no relatives that can be identified, assets are then deposited with a county treasurer until claimed.

When there is a will, a person you name in the will to manage your affairs, the executor, will oversee managing the estate. However, a probate court must first deem the will valid and approve the named executor.

The probate process varies by jurisdiction, with some being more time-consuming and costly than others. For this reason, many families rely on the use of revocable trusts. It takes a little more work at the start of the estate planning process but streamlines distribution and protects heirs.

The will contains specific instructions for real estate, personal property and any other assets without a beneficiary designation. Most retirement savings accounts and life insurance policies have a beneficiary named and the assets go directly to the heir, bypassing probate.

Think of a trust like a Ziploc bag—during your lifetime, it is easily opened, and assets can be moved in and out as you wish, including changing who will receive what. When you die, the bag becomes an irrevocable trust, and the trustee deals with everything contained in the trust as per the trust's instructions.

A well-planned estate brings peace of mind to parents, who know they have done right by themselves and their family. It also fosters conversations about admittedly difficult topics, helping most families prepare for one of life’s eventualities.

Reference: Star Tribune (Oct. 30, 2023) “Let your dying wishes be known by estate planning—before it’s too late”