Like many people, you may recognize the need for estate planning, yet not have a plan in place. In fact, over half of all Americans do not have even a basic estate plan in place despite acknowledging the need for one. Often, the reason for the seeming disparity is the simple fact that the average person doesn’t know where to begin given that most estate planning tools and concepts are foreign. Although every estate plan is unique, a good way to get started is to familiarize yourself with some of those tools and concepts. Toward that end, a North Dakota estate planning attorney at German Law Group explains some of the most common estate planning documents.
Last Will and Testament
You will probably not be surprised to learn that most people use a Last Will and Testament as the foundation of their initial estate plan. Executing a Will ensures that you will not leave behind an intestate estate. Dying intestate means the state decides what happens to your estate assets using the state intestate succession laws. Instead, your Will allows you to make specific and/or general gifts to loved ones. In addition, your Will lets you appoint someone as the Executor of your estate. The Executor is responsible for overseeing the administration of your estate. Finally, your Will offers you the only opportunity you have to officially nominate a Guardian for your minor child should one ever be needed.
Although once used almost exclusively by wealthy families to protect and pass down the family wealth, trusts are now commonly found in the average estate plan. A trust is a relationship where property is held by one party for the benefit of another party. A trust is created by the owner, also called a “Settlor”, “Trustor” or “Grantor” who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. Trusts are broadly divided into two categories, testamentary and living trusts. A testamentary trust does not activate until after the death of the Settlor whereas a living trust takes effect as soon as all the trust agreement is in place and the trust is funded. A living trust can be further divided into revocable and irrevocable living trusts. A trust can help achieve a wide variety of estate planning goals and can even serve as the foundation of your estate plan if probate avoidance is desirable.
Throughout the course of your lifetime, you will make many decisions regarding your own health care. There may come a time, however, when you cannot make those decisions because of your own incapacity. An advance directive helps you plan for that possibility. The State of North Dakota recognizes two types of advance directives, including:
- Power of Attorney for Health Care – allows you to appoint someone to make decisions about your medical care, including decisions about life-sustaining treatment if you can no longer speak for yourself.
- Health Care Instructions – this is North Dakota’s version of a Living Will which allows you to state your preference for life-prolonging procedures if you are terminally ill.
Power of Attorney
A power of attorney allows you to appoint someone as your Agent to act on your behalf in legal transactions. There are two types of power of attorney, general and limited. A general power of attorney (POA) gives your Agent almost unfettered authority to act on your behalf, meaning your Agent can engage in financial transactions on your behalf, enter into contracts in your name, and sell your assets. A limited POA, on the other hand, only gives your Agent the specific authority indicated in the POA agreement. If you make any POA durable it means that your Agent’s authority will survive your incapacity.
Contact a North Dakota Estate Planning Attorney
Please join us for an upcoming FREE seminar. If you have additional questions or concerns about estate planning, contact a North Dakota estate planning attorney at German Law Group by calling 701-738-0060 to schedule an appointment.