On behalf of Chandler and Brown, Ltd. posted in estate planning on Friday, July 21, 2017.
Drafting a will and considering heirs are not the only components of Minnesota estate planning. Plans should also include the possibility that anyone may be unable to deal with their daily affairs because of an incapacity from a serious injury, illness, mental impairment, age or substance abuse.
Incapacity can impair the ability to make sound financial and personal decisions. It may limit the ability to engage in daily activities, make health care decisions, pay bills, manage property or sell assets.
A health care power of attorney allows a person to designate a trusted individual to make health care decisions for them. Through a living will, a person can approve or decline certain medical treatment under certain conditions, particularly near the end of life. Similarly, a do not resuscitate order prohibits all medical providers from administering CPR if a person goes into cardiac arrest.
Without these directives, hospitals and physicians may prolong life through artificial means. This may last, despite the person’s wishes, for months or even years.
A person’s property may also be wasted or lost if they have an incapacity. To help prevent this, property may be transferred to a revocable living trust. Under this arrangement, a person may designate themselves as a trustee with complete control over their affairs if they keep their capacity. Upon incapacity, a successor trustee automatically takes control of the property.
A durable power of attorney also allows the person to designate an agent to act on their behalf on financial and daily affairs. This document is comparably easy to implement. Holding property with others is another way to provide protection. It allows another person to have instantaneous access to property and authorizes them to use it to meet immediate needs.
Even though implementation of joint ownership is comparatively uncomplicated and inexpensive, it has shortcomings. The other co-owner has instant access to property and the owner does not have the ability to instruct the other co-owner on its use. There may be git tax liability if the designated co-owner is not the owner’s spouse. If the owner dies before the other co-owner, property interests are transferred without necessarily reflecting the owner’s intent.
This planning must comply with Minnesota law and address many eventualities. An experienced attorney can help assure that these documents are properly drafted so that a person’s wishes are carried out without ambiguity or disputes.