Broker Check

Take Steps Today to Manage Your Estate Tomorrow

In this ebook, you'll learn the critical elements of an estate strategy. Considering these crucial details may help an executor uphold your values, goals, and desires for your estate.



Thank you! Oops!
Why would I want a Trust?

Why would I want a Trust?

March 18, 2024

If you are of a certain age, you may be getting invitations to learn about how to MANAGE and AVOID probate. Usually, those invitations are the prelude to a sales pitch from an attorney who would like to sell you a trust. Trusts can be a great estate planning tool, but they aren’t for everybody. And often, a trust that is proposed at a seminar is more expensive than a standard estate planning package.

As a fee-only fiduciary financial planner in St. Paul, I routinely advise my clients on the critical need for basic estate documents. If you are married. If you have children. Or, if you own significant property, you absolutely need a few basic estate documents. Specifically:

  • Last Will and Testament to list your assets, to identify the person who will be responsible for executing your wishes and to describe who you wish to receive them.
  • A Financial Power of Attorney to identify the person you trust to make financial decisions for you if you are not able to do so before you die.
  • A Medical Power of Attorney to identify the person you trust to make financial decisions for you if you are not able to do so before you die.
  • Current beneficiary designations to identify the people to inherit, life insurance, retirement accounts and other assets. Today, most financial accounts and even your home could have beneficiaries identified to simplify the estate process.
  • Maybe a trust to spell out specifics of a complex estate plan. Many times trusts are useful for avoiding probate, but most people in Minnesota will not be subject to probate at their death.

Some General Issues

Are you concerned about keeping your estate private?

Then you want to think carefully about probate. Probate is a public process.

Are you concerned about paying estate or inheritance taxes, or your heirs paying income taxes?

Depending on the state where you die, your estate could be liable for estate taxes AND/OR your heirs could be liable for inheritance taxes. AND this does NOT even consider that someone would inherits a traditional IRA, traditional 401(K) or annuity would owe income tax on this money. These instruments might be inherited without tax, yet distributions from these accounts are taxed as income in the year of the distribution.

Do you have minor children?

If so, you should identify the person you wish to provide care for them if you are gone (a guardian) AND you should probably identify the person who is responsible for your children’s money (a financial custodian) when you are gone. Minor children will need someplace to live, and they are not legally allowed to own assets, so if you do NOT identify people to fill these roles, the probate court will do so. And your estate will pay the court and legal expenses of the process.

Do you have children with special needs?

If you have heirs with a history of financial difficulty, or other special needs, you could use specific instruments to provide for them AND to protect them from harm.

I have prepared a helpful guide, What-Issues-Should-I-Consider-When-Creating-My-Estate-Plan-2024 If you would like a copy just follow this LINK.

If you have more questions about how to get started with an estate plan, you might benefit from a visit with an experienced, highly-trained, CERTIFIED FINANCIAL PLANNER™ professional and Behavioral Financial Advisor in West Saint Paul, Minnesota to help better understand your options. I love to meet new people. So, follow this LINK to find a time for us to have a get-acquainted visit.

I am a financial planner who is an advocate for my clients ALL THE TIME – a fiduciary financial planner. I provide guidance based on clients’ best interests, not commissions or sales quotas. I think it’s the best way to serve clients and I am thrilled to work this way all the time.

And yes, I’m still taking on a few great families to be part of my financial planning practice in West Saint Paul, Minnesota and, thanks to Zoom, across the country.

Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.