King & Wood, P.A.

Does an Estate Plan Improve Retirement?

“These estate and legacy planning tools and strategies can help lower your taxes, protect your wealth and more, leaving you to relax during your golden years.”

Estate planning is more than determining who you want to inherit your worldly goods. It’s about planning for taxes, protecting yourself while alive and making life easier for heirs by streamlining asset transfers. A recent article from Kiplinger, aptly titled “Here’s How Estate Planning Can Make Your Retirement Easier,” explains it in detail.

Trusts are used to protect assets and are widely considered the most effective tools for estate planning. Timing matters in estate planning. If you might need to apply for Medicaid for long-term care, keep in mind there is a five-year look-back period. Trusts need to be funded for at least five years before assets are considered exempt for Medicaid purposes.

Let’s say you establish a trust when you turn 70 but need long-term care at age 73. Medicaid won’t consider you eligible until age 75. We can’t know when we will need long-term care. However, planning ahead makes applying for Medicaid better than dealing with an application during a health crisis. Talk with your estate planning attorney about a Medicaid Asset Protection Trust to see if this might be a good fit.

Life insurance is often used to help with estate taxes. While most of us aren’t likely to worry about estate taxes while the federal exemption remains high, there are still state estate taxes and some state inheritance taxes to consider. The federal estate tax exemption may not sunset in 2026. However, a life insurance policy may be an option for your family if it does. Today’s life insurance policies are often combined with long-term healthcare coverage, which is always a wise option as we age.

Beneficiary designations are an often-overlooked estate planning pitfall with costly consequences. If you’ve named someone on an account as the beneficiary, they will receive the asset, regardless of what your will says. If you neglect to update your beneficiary designations, it will be next to impossible for other heirs to get the assets, even if they do go to court. This is an easy thing to fix. Review beneficiary designations every time you review your estate planning documents.

Estate and retirement planning doesn’t end once you have a plan in place. Both estate plans and retirement plans need to be monitored and updated. Tax laws change, markets fluctuate and personal circumstances change.

Regular reviews of your estate planning with your estate planning attorney every three to five years will allow you to ensure that your wishes are current, and no opportunities have been missed. Regular updates will ensure that beneficiaries are correct, trusts are funded properly and your will is still aligned with your state’s laws.

Reference: Kiplinger (Feb. 18, 2025) “Here’s How Estate Planning Can Make Your Retirement Easier”

How to Avoid Estate Planning Mistakes in 2025

“If these things get overlooked, you risk leaving your loved ones with extra challenges during what’s already a tough time.”

Even if you could remove all of the emotions about estate planning, like considering your eventual demise and the possibility of incapacity, it can still feel a bit overwhelming. Having an experienced estate planning attorney on your team makes the process far easier, with the knowledge you’re in good hands. A recent article from GO Banking Rates, “4 Expert Insights on Avoiding Estate Planning Pitfalls for 2025,” explains how estate planning helps to avoid family fights, lost assets and legacies.

Estate Planning encompasses your entire life. Wills express how you want assets to be distributed, and trusts minimize taxes by taking assets out of the probate estate. However, an estate plan is more than these two pieces. Estate plans include incapacity plans, caring for children and transferring wealth in a number of ways.

If someone becomes incapacitated and hasn’t created a Durable Power of Attorney, no one can manage non-healthcare matters, from paying utility bills to maintaining their home. A family member must go to court to obtain guardianship to do anything.

Every estate plan should include a Healthcare Power of Attorney and HIPAA release authorization so a designated person can be involved with their loved one’s healthcare, talk with their doctors and be involved in any medical decision-making.

Keeping beneficiary designations up to date. Beneficiaries aren’t just the people you name in a will. Designated beneficiaries are those listed on retirement accounts, investment accounts, life insurance policies and other documents to receive assets when you die. Make sure these names are up to date, especially if you haven’t reviewed them in years. Any account with a beneficiary designation does not go through probate, and your will has no control over these assets.

Things will get messy if beneficiaries on your accounts are no longer in your life. Assets could go to an ex-spouse, an estranged family member, etc.

Choosing your executor with care. Many people get stuck when there is no obvious person to manage this task. An experienced estate planning attorney can help you work through this issue, since a poor choice could put your entire estate plan at risk. Whoever you choose to serve as executor—the person who manages your estate—will need to deal with financial institutions, family members, government agencies and every facet of your life. Many automatically name their eldest child or best friend, which might lead to disaster if they are not available, good with details, fiscally knowledgeable, or able to manage your family’s personalities. Ensure that they are up for the task and also have a backup executor named.

Introduce your family to your estate planning attorney, financial advisor, CPA and other professionals in advance. The people who help you manage the business side of your life will be able to help you better if family members know who they are, how to contact them and have already met them. They don’t have to be friends. However, making introductions in advance can make their work together easier.

Reference: GO Banking Rates (Nov. 17, 2024) “4 Expert Insights on Avoiding Estate Planning Pitfalls for 2025”

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

“A farm couple spent a lot of money on their estate plan years ago. However, now it’s outdated.”

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”

What Does Your Estate Plan Include Besides a Will?

“When you chose to write a will, you have taken an important step in the direction of planning for your family and beneficiaries.”

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 Does Your Estate Plan Include Besides a Will?

“When you chose to write a will, you have taken an important step in the direction of planning for your family and beneficiaries.”

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?

“Discussing estate planning with others can be uncomfortable and easily avoided, yet this is an important part of financial 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 Does Estate Planning Protect Young Children?

“To make sure that your children are taken care of if something happens to you, it’s important to appoint a guardian, establish a trust and ensure there’ll be financial support.”

Once you have a child, you’ve got a bundle of joy—and a lifelong commitment to caring for the child, sometimes even after they reach adulthood. What would happen if something happened to you and your partner? To be sure your child or children are taken care of, you’ll need to take these estate planning steps, as explained in a recent article from Kiplinger, “To Protect Your Kids, Consider These Estate Planning Steps.”

Appointing a guardian. Planning for the absence of parents from a physical and financial perspective needs to be done. Parents need to establish a guardian and have the person named in their will. It may be a good idea to name a secondary guardian if something happens and the primary guardian is unwilling or unable to serve in this role.

Create a trust. Parents should consider creating a trust for their children to ensure that there is money to provide for their care if both parents die. A child under the age of 18 is a minor and, as such, may not legally hold title to property. A trust is used to hold assets for the child’s benefit. The language of the trust would have instructions to provide for the children’s education, health and support.

There are two basic trusts to consider. A revocable trust is created during a person’s lifetime and can be changed anytime by the trustmaker. A testamentary trust is created as part of a will. Neither trust needs to be funded until the person passes away, at which time the property of the decedent is placed in a trust if the will contains the correct instructions. An estate planning attorney will be able to structure this plan.

Assign a trustee. This person manages the trust assets for the children's benefit. They need to be financially responsible people who can manage the funds for the children. The trustee can be a family member but should not be the same person chosen as the guardian. Keeping these roles separate ensures that the guardian will not misuse funds. Another option is to hire a professional to serve as the trustee. Professional trustees, including banks or financial advisors, usually charge a percentage of assets. In some cases, estate planning attorneys serve as trustees for minor children.

Establish terms of distribution. It’s up to the parents to decide how their children should receive trust assets. They can mandate principal distributions at certain ages, like a certain percentage at age 20, another at 30 and the balance at 40. While the parent dictates the terms of distribution while the children are minors, the trustee will be the one to decide on distributions for food, health, education, or extracurricular activities.

How do you be sure there will be money for your children? Parents should purchase life insurance, since most young parents don’t have a lot of liquidity. Term policies are the least expensive and can be for ten, twenty, or thirty years, during which the policy is guaranteed if the premium is paid. Whole life insurance is another option. However, it is more expensive.

Start a 529 college savings fund. These accounts can be funded through automatic withdrawals from a checking account, or family members can be encouraged to make gifts to these accounts. In some states, there are state income tax benefits for residents. The growth is tax-free if the funds are used for qualifying educational expenses.

When the child becomes a legal adult. Once a child celebrates their 18^th birthday, they are legal adults, and parents lose their rights. New adults should have a healthcare proxy so someone can make medical decisions for them in case of incapacity. They should also execute a HIPAA disclosure form so healthcare professionals can discuss their medical care with parents.

If a child has special needs. An estate planning attorney will create a Special Needs Trust to hold assets and name a trustee to manage the funds. This trust allows a child with special needs who may be eligible for government benefits to continue to receive benefits in addition to distributions from the trust.

Reference: Kiplinger (Nov. 19, 2023) “To Protect Your Kids, Consider These Estate Planning Steps”

Do Heirs Pay Credit Card Debt?

“It's a morbid yet common worry: What happens to credit card debt when you die?”

When you consider the average credit card balance in 2023 was $6,365, chances are many Americans will leave an unpaid credit card balance if they die suddenly. A recent article from yahoo! finance asks and answers the question, “What happens to credit card debt when you die?”

Many people think death leads to debt forgiveness. However, this isn’t the case. Some forms of debt, like federal student loans, may be discharged if the borrower dies. However, this is the exception and not the rule.

Credit card debt doesn’t evaporate when the cardholder goes away. It generally must be paid by the estate, which means the amount of debt will reduce your loved one’s inheritance. In some cases, credit card debt might mean they don’t receive an inheritance at all.

Outstanding credit card debt is paid by your estate, which means your individual assets owned at the time of death, including real estate, bank accounts, or any other valuables acquired during your life.

Upon death, your will is submitted to the court for probate, the legal process of reviewing the transfer of assets. It ensures that all debts and taxes are paid before issuing the remaining assets to your designated heirs.

If you have a will, you likely have an executor—the person you named responsible for carrying out your wishes. They are responsible for settling any outstanding debts of the estate. If there’s no will, the court will appoint an administrator or a personal representative to manage the assets.

In most cases, your heirs won’t have to pay off your credit card debt with their own funds. However, you may be surprised to learn there are exceptions:

• Married people living in community property states. In a community property state, the deceased spouse is responsible for repaying credit card debt incurred by their spouse. In 2023, those states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.
• Credit cards with joint owners. If you had a joint credit card shared with a partner or relative, the surviving joint owner is responsible for the full outstanding balance. Only joint users are responsible for repaying credit card debt. If your partner was an authorized user and not an owner, they aren’t legally responsible for the debt.

Debt collectors may try to collect from family members, even though the family members are not responsible for paying credit card debts. The debt collector may not state or imply that the family member is personally responsible for the debt, unless they are the spouse in a community property state or a joint account owner.

If a debt collector claims you personally owe money, request a debt validation letter showing your legal responsibility for the debt. Otherwise, you have no legal obligation to pay for it yourself.

When someone dies, their estate is responsible for paying debts, including credit card debt. However, debt is repaid in a certain order. In general, unsecured debt like credit card balances are the lowest priority and paid last.

Some accounts are exempt from debt payment:

• Money in a 401(k) or IRA with a designated beneficiary goes directly to the beneficiary and is exempt from any debt repayment.
• Life insurance death benefits go directly to the named beneficiary and go directly to the beneficiaries.

If a loved one has died and they had credit cards, stop using any of their cards, even if you are an authorized user or joint owner. Review the deceased’s credit report to learn what accounts are open in their name and the balance on each account. Notify credit card issuers and alert credit bureaus—Equifax, Experian, and TransUnion. You may need to submit a written notification, a copy of the death certificate and proof of your being an authorized person to act on behalf of the estate.

Talk with an estate planning attorney to find out how your state’s laws treat the outstanding debt of a deceased person, as these laws vary by state.

Reference: yahoo! finance (Nov. 9, 2023) “What happens to credit card debt when you die?”

When Should You Update Your Estate Plan?

“From the birth of a child to a newfound charitable drive, these are the instances in which an alteration to your estate plan is critical.”

We know we need to see our doctor for annual checkups and see the dentist every six months, not to mention getting a good night’s sleep, brushing and flossing our teeth. In the same way, your estate plan needs regular maintenance, according to an article from The Street, which asks, “When Is It Time to Update Your Estate Plan?”

Far too often, estate plans are created with the best intentions and then lie dormant, in many cases, for decades. Provisions no longer make sense, or people in key roles, like executors, either move away or die.

Failing to update an estate plan can lead to a beloved child being disinherited or an animal companion ending up in a shelter.

This is an easy problem to solve. However, it requires taking action. Scanning your estate plan once a year won’t take long. However, when certain events occur, it’s time to bring all your estate planning documents to an estate planning attorney’s office.

Here are a few trigger events when you may want to make changes:

Welcoming a new child into the family. Wills and trusts often contemplate future children. However, when the children arrive, you’ll need to update wills, trusts and beneficiary designations. Life insurance policies, investment accounts and retirement accounts allow you to name a beneficiary, and the proceeds from these accounts go directly to the beneficiaries, bypassing probate.

If no beneficiary is named or cannot be located, the asset usually goes back into the estate, meaning it goes through probate and there may be tax liabilities.

Charitable giving goals often change over time. An organization with great personal meaning in your twenties may be less important or may have closed. If you’ve become involved with a charitable mission and want to leave assets to the organization, you’ll want to create a charitable bequest in your will or trust. Those changes need to be reflected in your estate plan.

People’s ability to serve in fiduciary roles may have changed. If the people you assigned certain roles to—like trustees, executors, agents, or the guardian named for minor children—may no longer be suitable for the role. The person you selected to serve as a guardian for minor children may not be available or willing to manage adolescents. If your trustees are over 70, you may want to name an adult child to serve in this role.

Reviewing insurance policies needs to be done regularly. In some cases, the value of life insurance proceeds may be subject to estate tax. Proper planning should be able to avoid this by making certain the policy is not included in your taxable estate.

If you are considering taking out a new life insurance policy, revisit your existing plans with your estate planning attorney. It may make sense for you to create an insurance trust, which allows you to exempt certain assets from your taxable estate.

Are pets an important part of your life? If so, you may want to make plans for who should take care of your pet if you pass away. In many cases, a pet trust works to name a trustee to manage funds for the pet’s care and formally outlines how you want your pet to be cared for.

Reviewing your estate plan every three to five years with your estate planning attorney or whenever a significant life event occurs will ensure that your wishes are followed.

Reference: The Street (Oct. 30, 2023) “When Is It Time to Update Your Estate Plan?”

How Estate Planning Conveys Your Wishes

“Estate planning involves taking inventory of your assets and liabilities and deciding how your survivors deal with those upon your death.”

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”