Fewer than half of all families follow the traditional structure of a father, and mother and their children, but estate planning documents often do not reflect this shift. Families in Minnesota may need to make changes to traditional estate planning documents to suit their own situations.
Those situations might include parents who live together but are not married, cohabiting couples without children, families with stepchildren and single parents. A trust is often helpful in complex family situations, but a standard trust could still lead to problems. In some cases, confusion could arise because of legal terminology. Words such as “issue” or “descendants” may not always encompass all the people that the creator of the estate plan assumes they will. In other cases, legal documents may not be flexible enough to accommodate these family configurations. However, there are several options for making those documents more flexible or for allowing changes.
For example, a person could be given the power to appoint beneficiaries. The use of decanting provisions is on the rise. This allows the trustee to merge the trust into a new one that may have revised administrative provisions and can permit a number of issues to be fixed. Appointing an institutional trustee who has the discretion to make distributions can make a trust more flexible than one with a single beneficiary.
An attorney may help a person understand what options are available that would best suit a person’s situation. There are several other factors that should be taken into consideration, including whether any assets are passed by beneficiary designation. This could be retirement accounts or life insurance policies among other types of accounts. Since beneficiary designations override wills and trusts, they should be consistent with the rest of the estate plan. People may also want to consider what documents they need in case of incapacity.