Impact of Estate Planning Documents

As the planning Attorney you do not always see how the documents you’ve thoughtfully drafted for clients work in real life.  When I meet with families that come in for estate planning and we talk through all of their goals, assets they own, how they want to distribute them, etc.  We put together a plan that fits with the picture they’ve painted as of that point in time.  Years down the road, when that spouse or child needs to activate one of the estate documents we drafted, will it work?

I’ve seen the answer to that question go both ways depending on the estate planning documents the client has in place.  The issue often comes up when a parent or loved one is sick or incapacitated and unable to act on their own behalf.  In those situations the documents that are most often used are the health care directive and financial power of attorney.  Usually when you think about estate planning you think about a Will or a Trust.  A comprehensive estate plan also includes both a health care directive and a financial power of attorney.

A health care directive is the form where you nominate someone to make healthcare decisions on your behalf if you are unable to it do yourself.  Family or a spouse is not automatically given that right.  You need to complete a health care directive and nominate someone to act.  Minnesota does not have a standard health care directive which can make my job harder and create more confusion for clients.  Some clients that come in have shown me three or four different forms they have filled out at various clinics they go to or forms they have obtained from the internet or even a class at Church.  What should they use?  Minnesota law spells out what a health care directive should contain.  We use that guidance to create a standard short form that is portable and can be used at most any facility or carried with you when you travel.

The importance of the form was recently demonstrated.  Several years ago I put together health care directives for a married couple as part of their estate plan.  The wife was recently diagnosed with severe dementia and hospitalized with the plan to move her to a nursing home.  The hospital looked to the husband to provide a health care directive on behalf of his wife that showed he had the power to make decisions for her.  He provided the copy we completed several years ago giving him the ability to act.  The husband was able to make decisions with the doctors about what care she needed and where she needed to be moved.  Without this form, the hospital was going to require him to establish a guardianship through the court that would allow him to make health care decisions for his wife.  This would have been a costly and time consuming process when he already had enough on his plate without trying to navigate court hearings, filings and forms.

The financial power of attorney form is the other document that is most often activated when a loved one can no longer manage their finances.  There are two types, a common law power of attorney and a Minnesota statutory short form.  By far the majority of clients will only need a statutory short form power of attorney.  This document is an established form provided by Minnesota statute with the format and all the types of financial uses spelled out in the form.  It is very effective and widely accepted throughout the state.  Common law power of attorney forms are used much less and tend to be needed only in very specific or complex situations not covered by the standard statutory language.

To use the financial power of attorney, it is important to keep an original signed document.  Banks or other financial institutions should keep a copy of your form and you keep the original.  A client recently needed to use the power of attorney form we drafted for her and her husband.  Her husband was in memory care in an assisted living facility.  The wife needed to sell their jointly owned house and move into an apartment for herself.  She was able to use the original power of attorney form her husband executed naming her to act on his behalf to sign all the paperwork at the closing of the house sale.  Without it she would have needed a court approved conservatorship for her husband to sign on his behalf.  Again, a costly and time consuming process that could be avoided.

As our Attorney, Laura Hansen, reminded us last week, now is the time to act, no more “thinking” about getting your estate plan together.  Please send me an email at with any topic suggestions or requests you may have.