By Lowell V. Stortz, attorney, Leonard, Street and Deinard

The Basics
Everyone needs:
o Power of Attorney, designate
o Health Care Directive
o Will

Power of Attorney designation grants “attorney-in-fact” the power to handle your business transactions - choose one carefully. Broad sweeping powers include:
o Banking
o Real estate transactions
o Business operations
o Investment transactions
o Insurance transactions
o Gifts, may include gifts to the attorney-in-fact

Other Power of Attorney considerations:
o Document is effective immediately - choose your attorney-in-fact with care!
o If in doubt, consider designating two people, requires joint action
o No need to give the form to your attorneys-in-fact until you want them to use it
o Can revoke at any time - automatically terminates at divorce, separation, or death

Health Care Directive
o You designate a Health Care Agent to make health care decisions if you are unable to communicate
o You direct your Health Care Agent or medical provider by expressing your health care views
o Medical providers who do not wish to follow the directive must transfer care
o Form must be validly signed
o Minnesota requires notarized signature or two witnesses who are not heirs

Wills and “Living” Trusts - Why do I need a Will? Designate the right people to:
o Handle your assets
o Care for your children
o Determine how your assets and property will be distributed
o Avoid unnecessary estate taxes
If you don’t prepare a Will, the State will make decisions for you!

Personal Representative, Guardians and Trustees
o Personal Representative collects and distributes assets
o Guardian will care for the Children (unless contested)
o Trustee will hold and distribute assets for children

Distribution of Assets
o Specific gifts to friends, family members, or charity
o Trusts for children to designate use and control distribution
o Personal Property list

Avoid Unnecessary Taxes
o Currently each person can transfer up to $1 million without paying federal gift tax and $2 million free of federal estate tax (the “Unified Credit Amount”) (Minnesota Exemption is $1 million)
o For estate tax calculation, EVERY asset is included (e.g., life insurance benefits, retirement assets, etc.)
o If married, each spouse is entitled to transfer the Unified Credit Amount without paying estate taxes ($4 million today)

This information was presented at the Metro Regional Convention, May 2007 by Lowell V. Stortz, an attorney with Leonard Street & Deinard.