Estate Planning In North Dakota

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Why plan your estate?

To many people, “estate planning” sounds like something only for the rich. Yet few families today can do without it. If you do not make a plan, state and federal laws decide what happens to your estate.

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People spend a lifetime working and building an estate (resources) to carry them through their retirement years. To many, “estate planning” sounds like something only for the rich. Yet few families today can do without it. Some people avoid estate planning because it deals with attitudes and feelings about death, property ownership, business arrangements, marriage and family relationships. Others neglect or postpone estate planning with such excuses as “I’m too young” “I don’t have that much,” “It’s too expensive,” “I’m in excellent health” or “I don’t have time.” Investing some time and money now is worth the effort to avoid the confusion, delay, expense and family quarreling that might occur if you die without an estate plan. If you do not make a plan, state and federal laws decide what happens to your estate.

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Why develop an estate plan?

Accept the fact that you are going to die someday. Ask yourself, "if I should die before tomorrow:

  • What would happen to the property for which I have worked a lifetime?
  • Who would care for my minor children or aging parents?
  • Would my spouse and children be provided for in a fair and equitable manner?
  • Would the family business continue?
  • Would the estate settlement be conducted by someone with my family’s interests and needs in mind?
  • Would estate and inheritance taxes, probate fees, and other administrative or legal costs be held to a minimum?

If you have not considered these and related questions, now is the time to get started in estate planning.

Basically, estate planning is the process of arranging your affairs to meet your objectives regarding the use, conservation and disposal of your property. It involves the coordination of all your properties (stocks, bonds, cash, real estate, business interests, life insurance, retirement benefits and other assets) into a total program.

You cannot take these "riches" with you. Someone is going to inherit your property, so it seems only sensible to have the results of your efforts distributed according to your wishes and conserved, as much as possible, from estate and inheritance taxes and other costs of estate settlement.

Accept the fact that you are going to die someday. Ask yourself, "if I should die before tomorrow:

  • What would happen to the property for which I have worked a lifetime?
  • Who would care for my minor children or aging parents?
  • Would my spouse and children be provided for in a fair and equitable manner?
  • Would the family business continue?
  • Would the estate settlement be conducted by someone with my family’s interests and needs in mind?
  • Would estate and inheritance taxes, probate fees, and other administrative or legal costs be held to a minimum?

If you have not considered these and related questions, now is the time to get started in estate planning.

Basically, estate planning is the process of arranging your affairs to meet your objectives regarding the use, conservation and disposal of your property. It involves the coordination of all your properties (stocks, bonds, cash, real estate, business interests, life insurance, retirement benefits and other assets) into a total program.

You cannot take these "riches" with you. Someone is going to inherit your property, so it seems only sensible to have the results of your efforts distributed according to your wishes and conserved, as much as possible, from estate and inheritance taxes and other costs of estate settlement.

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What can a plan do for you?

A good estate plan can help provide financial security for you and your family now and in the future. A properly designed plan may reduce income, estate or gift taxes and various estate settlement costs.

A well-thought-out estate plan can protect your family from bitter quarrels by providing for contingencies. It can prevent the forced sale or disposition of a farm, ranch or family business. It can provide for skillful property management for younger family members, as well as for older family members who can no longer manage their own fi nancial affairs. No one is going to force you to make an estate plan. You may do nothing if you wish. However, not making an estate plan is, in fact, making one. For example, if you don’t make a plan, your solely owned property and share of tenancy in common property will pass to the people and in the proportions prescribed by North Dakota law. This may or may not be the disposal you would prefer for your estate.

What your attorney should know

You can save time and money by having necessary information and documents in hand for that fi rst visit to your attorney and other estate planning professionals. The following checklist is a condensed summary of information your attorney will need. You also may need actual documents, such as wills, deeds, major debt  instruments, past gift tax returns, income tax returns and financial statements for the past fi ve years, trust instruments, information relative to income tax basis of property and any other document in which you are not sure (after checking the document) how the property is titled or who would be responsible for the debt.

  1. Personal information (family members’ names, birth dates, addresses, occupations, Social Security numbers). Who will be guardian of minor children if both parents pass away? Who will be the trustee of any trusts that may be created by the will?
  2. Real estate (type of property and size, location and description, year acquired, cost, how titled, market value)
  3. Personal property (motor vehicles, machinery, livestock, crop inventory, home furnishings, jewelry, art, antiques, personal items. Describe the property and include cost, value, who owns it, how it’s titled.
  4. Bank and savings accounts (name of institution and location, exact names on accounts, amount in each account, how accounts are titled on the signature card, the number for each account)
  5. Stocks, bonds and other securities (description, when purchased, number, exact name of owner, face value, cost)
  6. Life insurance, long-term-care insurance policies and liability policies (company and address, policy number, face amount and any supplemental values, cash value and any outstanding policy loan, exact name of owner as the proceeds could be included in the insured’s estate for estate tax purposes, name of insured, beneficiary)
  7. Trusts (type, location, trustee, who established, exact name of benefi ciary, value of trust property)
  8. Notes, mortgages and other accounts receivable (description, year acquired, value, person who owes you, repayment plan)
  9. Mortgages and other real estate debts (description, name of creditor, date due and amount remaining to be paid, whether the debt is an individual or joint responsibility, whether it’s insured)
  10. Liens against personal property (description, name of creditor, date due, remaining amount to be paid, whether the debt is an individual or joint responsibility, whether it’s insured)
  11. Other personal liabilities (unsecured notes, notes endorsed, real estate taxes, personal property taxes, state taxes, federal taxes, unsettled claims and name of creditor, date due, amount remaining to be paid, whether the debt is an individual or joint responsibility, whether it’s insured)
  12. Retirement plans (pensions, profit sharing, deferred compensation, individual retirement accounts, Social Security, qualified domestic relations orders and amount invested, accrued benefi ts, annual benefi ts, death benefits)
  13. Other financial information (income last year, current income, salary, qualified domestic relations orders, retirement income, annuities, rents, interest, bonuses, dividends, trusts, capital gains)
  14. Taxable gifts (amounts, when made)
  15. Where important papers are kept (husband’s and wife’s wills, trust documents, deeds, insurance policies, stocks and bonds, financial statements, income tax returns for last five years, gift tax returns, contracts, partnerships and corporation agreements, profit sharing plans, divorce decrees, pre- and post-nuptial agreements, employment contracts, pension benefits).

The publications HE-446, “Inventory of Important Papers,” www.ag.ndsu.edu/pubs/yf/fammgmt/fe446.pdf and HE-445, “Family Records: What to Keep Where and For How Long,” www.ag.ndsu.edu/pubs/yf/fammgmt/fe445.pdf, may help you gather some of this information.

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