There are lots of moving parts to estate plans, but a great place to start, especially for parents, is with getting a will.

First off, what is a Will?

A Will is a document that tells the world, and a court, how to distribute your assets when you die. With a Will you can name the person who would be in charge of making sure your assets reach your intended beneficiaries. Your beneficiaries can be anyone you name, including your kids, friends or charitable organizations. Gifts to these individuals and entities can be made as a flat sum or as a percentage of your overall assets.

Wills must be documents in writing, signed and witnessed by two individuals over 18. However, handwritten Wills are not currently accepted in Minnesota.

What Else Do Wills Do?

Wills are the primary document available to parents to name legal guardians for their children if the parents were to pass away. There is no other document as widely recognized and well suited for guardian nominations as a will. Wills also allow for you to name financial custodians for your children’s assets if they were to inherit money before they turned 18.

What Wills Don’t Do….

Wills by themselves do not avoid probate, so a court will typically need to be involved in distributing your estate to your heirs and beneficiaries. That means once you die, your personal representative, the person you name in your Will to manage your estate and distribute your assets, can present your Will to the Court and get the paperwork they need to do things like sell or transfer your real estate and distribute your bank accounts and other assets to the people named as your beneficiaries.

Additionally, simple Wills do not make provision for longer term distributions to your beneficiaries where those long term distributions might be needed because of the age of the beneficiaries. For example, you may be the parent of a young adult age 20 or 21. If you were to pass away with a Will, then your 20 or 21 year old child would receive their entire inheritance immediately, with no restrictions or strings attached. If you’re the parent of a child age 7 or 8, if you pass away, that child’s money would be held, typically in a restricted account, unavailable to the child or the guardian until the child reaches age 18. Then when the child turns 18, they would receive their entire inheritance on their birthday or shortly thereafter.

Are There Other Types of Wills or Will Supplements?

There are many things you can do aside from Wills or to supplement Wills. One of those is to create a Will with a testamentary trust. These types of Wills have provisions in them that would create a trust for any minor children or young adult children if the parents passed away before the children were a certain age. The personal representative would be in charge of having the court establish the trust, and then the terms of the trust could be applied to the assets left behind so that the money could be distributed slowly over time or not until the child was a suitable age the parents predetermined when they drafted the plan.

There are many other options available to people and parents planning their estate that we didn’t talk about here today. If you don’t have an estate plan yet, you should look into getting your whole estate planned out to make sure your insurance fits into a holistic plan neatly to achieve all of your desired outcomes and goals.

This article is a service of Legacy Estate Planning. If you have questions or want to go deeper, please email us at taylor@legacyestateplanningmn.com to book a call.

Or check out my new book: The Parents’ Planning Pack: 10 Steps to Making Sure Your Kids Are Well Cared For - No Matter What.