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Wills, Trusts, Health Care Directives and Powers of Attorney

According to AARP, 60% of American adults do not have an estate plan, including many individuals who, if they were to die, have no strategy in place to care for their children.

Wills, trusts, health care directives, and powers of attorney are key documents that every well-planned estate should contain. It can be confusing to distinguish one from the other, which may be one reason so many of us put off dealing with them. Oftentimes, these are things we think we’ll tackle when we’re older when our health becomes a concern. We’ll live today, we say, and some time down the line, we’ll think about who will manage our healthcare and finances if we are unable to do so ourselves, or who will get our belongings when we’re gone.

The estate planning attorneys at Thorwaldsen and Malmstrom PLLP work with clients in Northwest Minnesota and Eastern North Dakota to help them understand the differences between these estate planning documents, including how they are used, and how each plays an important role in creating the estate you desire.

What is a Will?

Loosely speaking, a will is a legally binding document that directs the dispersal of your assets upon your death. If you have minor children, a will can appoint guardians to provide for their care after you are gone. It is possible to plan your estate without a will; however, we consider it to be one of the most basic and useful documents in designing an estate.

If you die without a will in Minnesota or North Dakota, “intestate laws” are in place to manage the distribution of your assets. These laws will determine who gets your property if you have not dictated that yourself. The property belonging to a person without any living blood relatives, who has not drawn up a will, will go to the state.

What is a Trust?

Wills and trusts are often confused with one another. One of the key differences between the two is that a will becomes effective upon your death; a trust goes into effect as soon as you sign it. A will dictates where your assets go when you are no longer here; a trust can be set up to move your assets before you die, upon your death, or even years after you have passed away.

While a trust does not allow you to plan for the care of minor children upon your death, it will help manage estate taxes, a feature a will does not offer. Wills and trusts are complementary tools for effective estate planning.

Do I Really Need a Health Care Directive?

Individuals over the age of 18, who want a say over their medical treatment, should have a health care directive. This is especially valuable should you become extremely ill and become unable to make your own healthcare decisions. A healthcare directive is an important document to add when planning your estate.

A health care directive honors your wishes concerning the type of medical treatment you should receive, what life-saving measures you do or do not want to be implemented, whether or not your organs should be donated, and may even include your funeral arrangement wishes. It also relieves your loved ones of the burden and guilt involved in making these difficult decisions on your behalf. This may end disagreements that could otherwise arise concerning your care, and help keep peace in your family.  

A law office experienced in estate planning will assist you in determining just what your health care directive should cover. Call Thorwaldsen and Malmstrom today to learn more.

Why Do I Need a Power of Attorney Document?

A power of attorney document legally permits someone to act on your behalf in various areas of life. It may be as basic as authorizing another person access to your checking account, with permission to sign checks to pay your bills; this is considered a limited power of attorney. 

Powers of attorney may be all-encompassing, permitting someone to operate your farm or business, make medical decisions on your behalf, decide when you should enter a nursing home, and handle all of your financial, medical, and legal decisions; this is called a general power of attorney.

You will be able to determine how much power this legal document hands the other person, who that person is, when the power of attorney kicks in, and when or if it expires.

Considering how much say over your life this legal document can give to another person, it’s imperative you put a lot of thought into choosing who you can trust to make your life decisions when you are unable to. Speak with a lawyer who understands all aspects of power of attorney; he/she will be able to walk you through your options and help you choose the best person to make decisions for you.

Have You Started Estate Planning? If Not, Why?

While estate planning can be complex, it doesn’t have to be overwhelming. And, because it’s so important to your future, and that of your loved ones, beginning the process sooner, rather than later, will ensure your needs are met, your family is taken care of, and your wishes followed.

For expert legal guidance in all areas of estate planning in Detroit Lakes, MN, and the surrounding area, contact Thorwaldsen and Malmstrom PLLP. We can provide you with a free consultation, as well as valuable information on wills, trusts, healthcare directives, powers of attorney, and more.