Recently, the North Dakota Department of Agriculture released a statistic that more than sixty-five percent (65%) of North Dakota residents over the age of 62 did not have a written estate plan in place. Estate planning is one of the areas in life where people know they should have something in writing, but they often don’t know where to start. Instead of making any decisions they might regret, the idea of an estate plan is discussed but fails the execution phase.
Estate planning discussions are sensitive and difficult conversations to have. You might have a preference for a certain child, relative or friend to be in charge of your estate, but you’re not sure if the survivor wants the burden. Conversely, one child may feel left out if not asked to be a part of the estate administration.
Although initiating these conversations is difficult, I often remind clients that transparency is the key to survivors getting along during a difficult and emotionally charged time. Further, this is an opportunity to empower your descendants and carry over common family values. If your descendants know that you have a vision for their collective future when you are gone, they will strive to fulfill a common family legacy through the generations.
Often, I hear clients say, “I don’t even know where to start.” The most important part is taking the first step of conversation. Once that has happened, planning for future generations often falls into place organically.
Setting a goal for survivors is a good place to start planning. For some families, having educational funding for children, grandchildren, nieces, nephews or cousins is of paramount importance. For others, maximizing tax benefits is important. For some legacy farm families, maintaining the family’s property legacy is important, while liquidity is less important.
Discuss your goals with your family and get of sense of what their understanding is for the future. Ask your family to help you know those family members who may be able to
Most attorneys will understand at initial appointments a client’s estate plan may be a work in progress, rather than something to which they are ready to commit immediately. When clients come in, I explain that “no body’s life stands still.” Attorneys expect clients to have their lives change and for documents to require updates.
When clients come in and they are just in the initial stages of conversation or early planning, but they still want to have some documents in place immediately, I recommend starting with the three basics: a simple Will, a durable power of attorney and a health care directive. These three documents are usually a good start in the event something catastrophic happens in the near future. These three basic documents lay the foundation for an unexpected death or disability and obviate the need for a medical or financial guardianship in the event of your incapacity.
Once the basic documents are in place, then having a conversation about whether additional estate planning documents are necessary becomes less stressful. The act of executing the basic documents can spur discussions around legacy planning, intervivos gifts, charity planning or family trusts.