Minnesota Wills and Trusts Blog

MINNESOTA ESTATE PLANNING  – FAQs

If I have a Minnesota will, does my estate avoid probate?

No.  A will does not avoid probate.  Instead, your will tells the probate court how your probate assets shall pass upon your death.

What are “probate assets” and “non probate assets”?

Probate assets include personal property and titled assets that are either held in the Decedent’s name alone, or held with another person in a form of ownership other than a joint tenancy with a right of survivorship.

In contrast to probate assets, there are also “non probate assets.”  Non probate assets are assets that will pass to your beneficiaries via a beneficiary designation.  Examples include life insurance, IRAs, 401Ks, Certificates of Deposit (CDs), and transfer on death deeds (TODDs).

It is very important to verify, and keep current, your beneficiary designations.  When a beneficiary is named on a non probate asset, like life insurance, your life insurance will pass to the named beneficiary without looking to your will to see how it should be passed.   Many people are surprised to see that years after a divorce, they may still have their ex-spouse named as a beneficiary on a non probate asset.

Can I name a beneficiary on my checking and savings accounts?

Yes.  A payable on death (POD) beneficiary can be named on your checking and savings accounts.  You should contact your bank to have this established.

Can probate be avoided?

Yes.  It is possible for a decedent’s estate to avoid probate if their probate assets do not include real estate and the probate assets are under $50,000.00.

There are additional estate planning methods that can avoid or minimize the need for a probate, but those methods go beyond the scope of this post.

What does it mean to own Minnesota real property as a “joint tenant”?

Spouses, for example, commonly own their homes as joint tenants.  A joint tenancy has a right of survivorship attached to it, meaning that when the first spouse passes away, the surviving spouse will become the sole owner of the real property (once an affidavit of identity and survivorship is filed with the appropriate county) without the need for the real property to go through the probate process.

What does it mean to own Minnesota real property as “tenants in common”?

Tenants in common do not have survivorship rights.  For example, if two people own a parcel of real property together, each titled owner is able to devise their interest to whomever they wish via a will or TODD, or, if no estate planning has been done, according to the laws of Minnesota intestate succession.

For more information on Minnesota estate planning, contact Attorney Jill Ide at 763-323-7676 or at jillide@weikellaw.com.

DO I NEED A HEALTH CARE DIRECTIVE AND POWER OF ATTORNEY?

Have you ever wondered how your day-to-day financial affairs would be handled if you were unable to take care of them yourself?  Who would make your health care decisions for you if you were unable to speak for yourself?  The answer is “no one” (without court involvement) if you do not plan for your incapacity.

Planning for incapacity is an important part of the Minnesota estate planning process.  A Minnesota Durable Power of Attorney and Minnesota Health Care Directive are two important incapacity planning documents.

A Minnesota Durable Power of Attorney allows you to name an Attorney-in-Fact who will make personal and financial decisions on your behalf if you are unable to act for yourself.  You can choose to grant the Attorney-in-Fact a broad range of authority over your affairs, or choose to be more restrictive.  Either way, the Power of Attorney gives a great deal of power to the Attorney-in-Fact so you want to be certain you name a trustworthy person to act on your behalf.  In addition, the Durable Power of Attorney is a valid document once it is signed, so you want to be sure to keep it in a safe place.

A Minnesota Health Care Directive gives you the ability to nominate a Health Care Agent to make your health care decisions for you in the event you cannot speak or decide for yourself.  The Health Care Directive also documents any wishes you have with regard to your health care.  For example, if you are in a terminal condition or persistent vegetative state, do you wish to be kept alive by artificial means or heroic measures?  Do you wish to receive experiment treatments or medications?  Do you wish to be an organ donor?  What are your religious beliefs?  Do you prefer cremation or burial?

Your Health Care Directive can be as descriptive or broad as you would like it to be.  The more information you can provide in your Health Care Directive, the less stressful it can be for your named health care agent to carry out your wishes.

Regardless of how descriptive your Health Care Directive might be, it is a good idea to discuss the provisions of your Health Care Directive with your named health care agent.  That way, if your health care agent ever does need to act on your behalf, they can have greater confidence knowing that they are making decisions you would have wanted.

If you have not planned for incapacity and you do become incapacitated, your loved ones may need to petition the court for the appointment of a guardian and/or conservator for you in order to have the ability to manage your health care and finances.  As with any court process, the guardianship and/or conservatorship process can be expensive and time consuming.

For more information on incapacity planning, a Minnesota Health Care Directive, or a Minnesota Durable Power of Attorney, contact Attorney Jill Ide at 763-323-7676 or jillide@weikellaw.com.

DO-IT-YOURSELF ESTATE PLANNING v. ESTATE PLANNING WITH AN ATTORNEY

Recently I came across an online article from U.S. News & World Report regarding the “Dangers of DIY Estate Planning.”

As I read the comments to the article, the reason consumers gave for choosing to do their will themselves rather than use an estate planning attorney boiled down to one thing…money.

Why pay an attorney for something you can do yourself for a lot less money?

Personally, I think the answer to that question is an easy one…because an attorney doesn’t just create a “will” or “trust.”   An attorney’s value also lies in the time we spend with our clients learning about their specific family situation, goals, what assets they own, what liabilities they owe, and then applying our knowledge to their specific facts to create a plan that will accomplish the client’s goals.

During the estate plan process, I have at least two office meetings with my clients.  The first one is the information gathering session.  This is where I gather all the pertinent information about the client’s finances, family situation, where they want their assets to pass upon their death, and who they want to serve as their personal representative(s) or guardian(s) for any minor children.  The first meeting is also an education session.  I think it’s important to educate my clients on what estate planning is and how their estate plan can meet their goals.

The second meeting is where we review, and the clients sign, the final documents.  I also provide clients with instructions on what to do now they have a new or updated estate plan.

In between the first and second meetings is when the plan is drafted.  The draft of the plan is sent to the clients for their review prior to the signing meeting.  If the clients desire any changes those changes are made prior to the signing appointment.

Finally, in addition to receiving an estate plan, face-to-face meetings, and professional advice, my clients also have the comfort of knowing that I am accessible if they have any questions about their estate plan.  My clients have my direct phone number and email.  If they are not able to get in touch with me immediately, I try my best to return phone calls and emails within 24 hours.

When you take all of the above into consideration, you quickly realize that comparing a DIY estate plan to an attorney-prepared estate plan is not comparing apples to apples.

Estate planning is not a one-size fits all deal.  It’s important that your specific needs or requests are addressed in your plan.  If you choose to DIY, a mistake may not be realized until it’s too late to correct it.  The bottom line is that just because you can do something yourself, doesn’t necessarily mean that you should.

For more information on Minnesota estate planning, contact Attorney Jill Ide at 763-323-7676 or jillide@weikellaw.com.

DO ONLY PEOPLE WITH LOTS OF ASSETS NEED A WILL?

People often think estate planning is only for the elderly or for parents with minor children, but that is not the case.  Anyone who is over the age of 18, whether they own a few assets or many, should have a will.

5 other categories of people who should take measures to create an estate plan include:

1. SINGLE PEOPLE WITHOUT CHILDREN NEED A MINNESOTA ESTATE PLAN.  It is much more common than it used to be to remain single long into adulthood.     Many single people own their own homes, life insurance, savings accounts, investment accounts, and retirement accounts.  We all work hard for what we have, and it is nice to have some piece of mind knowing that by creating a Minnesota estate plan your assets will get to where you want them to go.
2. UNMARRIED COUPLES or SAME-SEX COUPLES NEED A MINNESOTA ESTATE PLAN. Some people choose not to marry, while others are unable to marry.  Estate planning is crucial if you find yourself in this situation.  According to the laws of intestate succession, your assets will pass to blood relatives, not significant others or domestic partners.  If you want to leave your assets to a life partner, you will need to name that person in your will.  Minnesota does not provide property rights to unmarried individuals and these situations can be sticky to say the least.
3. MARRIED INDIVIDUALS WITHOUT CHILDREN NEED A MINNESOTA ESTATE PLAN.  During the initial estate plan meeting, I ask my clients how they want their estate to pass if their primary beneficiary or beneficiaries predecease them (or they pass at the same time).  The answers I receive from married individuals without children are generally very different from how their estate would actually pass if they didn’t do any planning and, instead, let the state’s intestacy statutes determine where their assets will go.  In Minnesota, if an individual has no children or grandchildren, no will, and their spouse predeceases them, the individual’s assets will go to their closest living relatives.  If parents of the individual are living, parents will inherit all assets.  If there are no living parents, then to the individual’s siblings, then nieces and nephews and it gets more remote from there.
4. BLENDED FAMILIES or STEP-FAMILIES NEED A MINNESOTA ESTATE PLAN.  If you are in a second marriage and you or your spouse has children from a previous relationship, setting out who gets your assets well in advance is particularly important.  The dynamics of blended families and step-families can vary greatly from one family to another.  Some people want to include step-children in their plans, while others do not.  Make sure that your wishes are honored by planning how you want your assets to pass.  In Minnesota, the default laws do not consider step-children as “heirs”; only blood relatives or legally adopted relatives are heirs.  If you want to leave assets to your step-relatives, it must be in writing in order to be enforceable.
5. CHARITABLE-MINDED FOLKS: If you desire to donate a specific dollar amount, a particular asset like stock or real estate, or you want to leave a percentage of your estate to your church or other charity, it is usually best accomplished through a written estate plan.  What better way to leave a legacy then with a planned gift to your favorite cause?

We realize that estate planning is not always a fun or easy topic to discuss, but here at Weikel & Boyd we try our best to make you feel comfortable during the planning process. If you have questions on Minnesota estate planning, contact Attorney Jill Ide at 763-323-7676 or jillide@weikellaw.com.

Ten Reasons to Plan Your Estate

1. What If You Become Incompetent?
   • Without a Plan
     • The courts pick the successor manager of your affairs.
   • With a Plan
     • You pick the successor manager of your affairs.
2. Who Raises Your Children?
   • Without a Plan
     • A judge decides without the benefit of your insight.
   • With a Plan
     • You nominate the guardian of your choice.
3. How Does Your Family Inherit Your Assets?
   • Without a Plan
     • Your family members receive your assets without benefit of your direction or trust protection.
     • Your state’s intestacy statute effectively writes your will. Assets pass according to state laws of descent and distribution.
   • With a Plan
     • Your family members enjoy the benefits of the plan you set up for responsible management of your assets.
     • You write your plan. You decide who receives your assets, as well as when and how they receive them.
4. You Have a “Blended” – Multiple Marriage – Family
   • Without a Plan
     • Your priorities are not even considered
     • Children from different marriages may not be treated according to your wishes
   • With a Plan
     • Your priorities prevail
     • You decide what goes to your current spouse and to children from different marriages
5. You Have a Special Needs Child
   • Without a Plan
     • Medicaid and SSI benefits are at risk
     • Your child may be disqualified from receiving Medicaid and SSI benefits and forced to use your assets for basic care
   • With a Plan
     • Medicaid and SSI benefits can be preserved
     • A Supplemental Needs Trust can hold assets so that the child can qualify for Medicaid and SSI benefits
     • Your assets remain available for other non-covered expenses
6. You Want Your Money to Stay in Your Family
   • Without a Plan
     • Your child’s spouse may benefit from your assets
     • If your child passes away prematurely, your daughter/son-in-law and a new spouse may receive your assets
   • With a Plan
     • Your child can receive absolute asset protection
     • A trust can ensure that your assets stay in your family, e.g., pass to grandchildren
7. Can Your Spouse and Children Survive Financially?
   • Without a Plan
     • They may need to downscale their lifestyle
     • Without the income replacement provided by life insurance, your family may not have the funds to maintain their current standard of living
   • With a Plan
     • They can enjoy financial security
     • With the income replacement provided by life insurance, your family can be protected from having to downscale their standard of living
8. You Have an IRA
   • Without a Plan
     • Your beneficiary designation form may not effectively reflect your current wishes
     • Your beneficiary may experience burdensome income tax consequences because of large required distributions within a short time frame
   • With a Plan
     • You choose the optimal beneficiary based on advice and counsel of your Financial Advisor, Attorney and CPA.
     • Your beneficiary may be able to minimize the income tax bite by “stretching” out distributions over time and enjoying the benefits of tax-deferred compounding.
9. You Own a Business
   • Without a Plan
     • There is no succession planning; no successor is named
   • With a Plan
     • You choose the succession plan and the successor
10. The Probate (Estate Settlement) Process is Cumbersome
    • Without a Plan
      • Your estate is subject to unnecessary delays and excess fees
      • Your assets become a matter of public record
    • With a Plan
      • Your assets may avoid probate entirely

If you would like to discuss estate planning with the author of this post, Jim Anderson please contact him at the Weikel & Boyd Law Firm via email at JamesAnderson@weikellaw.com or by phone at 763-515-1467.

Macy has been with the firm since August of 2009.  She graduated from Winona State University in 2005 with a BA in Political Science and a BS in Paralegal and is currently attending Augsburg College to earn a Master of Social Work and a Master of Business Administration.

Macy works in all areas of the general practice firm, but spends a majority of her time working on family law issues and estate planning.

As a paralegal Macy keeps the firm efficient by providing high quality, yet affordable services for the attorneys in the firm, thereby keeping costs down for our clients.

Home financing has changed a lot over the last few years.  If you have a revocable living trust (aka inter vivos trust) you may be finding this out the hard way if you are trying to refinance the real estate that is held in your trust.

Many home lenders are now requiring property owned in a trust to be transferred out of the trust in order to refinance that property…even if you are going to just move it back in to the trust in a few months.   But, rules are rules I guess!

The reason cited by many lenders for having this requirement is the potential investors they sell the loan to may not want to buy that loan if it was financed in the trust.  Title insurance companies are also beginning to get picky about this as they decide whether or not to issue a title insurance policy on such a property.

This brings up two strategies to get your refinance accomplished.  If you haven’t created a trust yet but are in the middle of creating one, do your refinance FIRST.  If you already have a Minnesota trust and you want to refinance your property in that trust to take advantage of historically low interest rates, you will need to have 3 documents drafted: 1) Certificate of Trust; 2) Affidavit of Trustee; and 3) Trustee’s Deed.  There will be attorneys fees associated with drafting these documents and your title company should not offer to do these documents for you.  There will also be filing fees charged by the county to record these documents.

Our firm regularly assists homeowners draft these technical documents and makes sure they are recorded at the right place at the right time so you can save hundreds of dollars per month.  If you are considering a refinance, call our office and we are happy to refer you to mortgage lenders who we think do a nice job of refinancing properties that are held in a trust.

You can contact the author of this post, Kristi Weikel, at 763-515-4070 or via email at Kristi@weikellaw.com

James T. Anderson is an attorney practicing in the areas of bankruptcy, estate planning, and probate.   James joined the Weikel & Boyd Law Firm in August 2010.

James comes to the firm with a strong bankruptcy and estate planning background.  In 2008, James founded an estate planning study group in the Twin Cities that now has over 30 members who meet monthly to discuss the latest in the estate planning world.  James also has significant experience in the area of bankruptcy.  Since 2007, he has represented clients in chapter 7, chapter 13 and chapter 11 bankruptcies.

For more information please contact Jim directly at:
Direct Dial: 763-515-1467
Email: JamesAnderson@WeikelLaw.com
Practice Areas: Bankruptcy, Estate Planning, Probate

Jill S. Ide is an attorney representing individuals in Estate Planning, Probate, and Family matters. Jill has been with the firm since February, 2007 when she started as a law clerk. In November, 2008 she became an associate attorney at Weikel & Boyd Law Firm, PLLC.

During law school, Jill volunteered on behalf of the Minnesota Justice Foundation as a certified student attorney for the 10th Judicial District Public Defenders Office in Stillwater. Jill also participated in William Mitchell’s Misdemeanor Clinic where she prosecuted misdemeanor cases as a certified student attorney.

Jill comes to the firm with a strong background in the criminal justice field. She completed her undergraduate internship with the Federal Bureau of Prisons in Rochester; and upon graduating from the University of St. Thomas Jill worked for the Minnesota Department of Corrections and was also a 911 Dispatcher for Washington County.

Jill is the go-to attorney in the Anoka County and Sherburne County area for couples with minor children who need their first estate plan all the way up to the empty nesters.  Jill has a compassionate and sensitive way about educating her clients to help them make tough decisions in the areas of wills & trusts as well as in tough family law situations dealing with custody, child support, parenting time and divorce.

For more information please contact Jill directly at:
Direct Dial: 763-515-2879
Email: JillIde@WeikelLaw.com

Kristi Weikel is the founding attorney and managing partner of the Weikel & Boyd Law Firm, PLLC. She is experienced in a multitude of practice areas through her representation of individuals and small business owners.

Kristi’s legal experience includes serving as a paralegal at a small and at a mid-sized law firm.  At both firms she gained valuable experience on large multi-party litigation cases.  She also worked as a law clerk during law school at a personal injury and estate planning Bloomington law firm. Kristi has been a paralegal educator both at the Minnesota School of Business as well as Kaplan University.  Kristi currently serves an adjunct professor at Northwestern College in St. Paul.

Kristi is an entrepreneur and educator at heart and seeks to education her clients to bring out the entrepreneur in each business client by counseling them to fine-tune their business operationally, practically, financially and legally. Kristi brings sensible legal solutions to the table for every client she interacts with.

Kristi works most often with people who are looking to sell their Minnesota Business or looking to buy an already existing business through an asset acquisition or a stock acquisition.  She works with those people to make sure their business structure is properly set up, the right documents are in place to protect the ongoign interests of the client and that after the dust settles from the closing of the sale she sees to it that each business owner has their estate planning and real estate affairs in place.

For more information please contact Kristi directly at:
Direct Dial: 763-515-4070
Email: KristiWeikel@WeikelLaw.com